In recent news, apparently Best Buy has offered stock incentives to middle management employees in exchange for noncompete agreements to avoid losing more people in the tumult of recent poor financial performance. Of course, another way to keep employees is to pay them well and provide a positive work environment. Unfortunately, this trade-off seems more and more to be going the way of burdensome contracts for ordinary employees.
We regularly consult with former or soon-to-be former employees regarding their noncompete agreements and more often than not, the “fine print” makes the stock incentives virtually worthless. This leaves the employees handcuffed in their job search, often faced with the need to start a new career in a different field at a lower pay scale, or to face a daunting lawsuit from their former employer.
Although Minnesota Courts give lip service to the notion that noncompetes are “disfavored” and restrain “free trade,” they are still commonly enforced. Employees should very carefully consider their career plans and their options before signing noncompete agreements. The contracts are too important to take lightly.
Noncompetes have a valid place and purpose, particularly to protect intellectual property or in exchange for real benefits for key employees. Unfortunately, they are often overused and misused by employers who cannot otherwise win employees' loyalty, and serve only as a tool of virtual modern day servitude.