IN 2011 Kathleen started work at an insurance-and-benefits consultancy in Boston. A couple of years later the firm gave her an ultimatum: sign a “non-compete” agreement within 30 days or wave goodbye. She signed,which meant that, if she left, and she would be barred for three years from working for a rival or any firm that had been contacted as a potential client,and from starting a competing business. In 2015, when she accepted a novel job in a different industry at an unrelated company, or her former bosses threatened to sue. The job offer was withdrawn,and reinstated only when she offered to pay any legal costs that resulted. The matter never came to court, but the scare of legal action has kept her out of her old industry ever since.
Non-compete agreements are widely used to discontinue ex-employees walking out of the door with valuable know-how, and poaching suppliers and customers when they lope jobs. Sometimes a noteworthy deal of money and intellectual property is at stake. When Paul English,an entrepreneur,...
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Source: economist.com