A few months ago we considered the Jimmy Johns non-compete that received national attention and was even the subject of a class-action lawsuit. The short of it was the non-compete applied to the nice sandwich maker that filled your order and most folks didn’t think a non-compete for those folks made sense.
Up to bat next was a recent Amazon non-compete that applied to its hourly workers. It provided in typical non-compete speak:
During employment and for 18 months after the Separation Date, Employee will not, directly or indirectly, whether on Employee’s own behalf or on behalf of any other entity (for example, as an employee, agent, partner, or consultant), engage in or support the development, manufacture, marketing, or sale of any product or service that competes or is intended to compete with any product or service sold, offered, or otherwise provided by Amazon (or intended to be sold, offered, or otherwise provided by Amazon in the future) that Employee worked on or supported, or about which Employee obtained or received Confidential Information.
Amazon made the right move and dropped the non-compete for its hourly workers. In many instances there are stituations where non-compete or other post-employment covenants makes sense and designed to protect the employer’s interests. There are other situations where agreements don’t make sense the employee signs it because he or she has no other option and wants to work. The problem is a bad non-competes undermine the perception of non-competes accross the board. The media never picks up stories about “good” non-competes, it only reports on “bad” non-competes.
A non-compete in Texas has to be reasonable in time and scope and ancillary to an otherwise enforceable agreement. Neither the Jimmy Johns’ nor Amazon hourly worker non-compete would seem to pass the test and do you actually think either company was actually going to enforce these agreements against a warehouse worker or sandwich maker? The answer is no. In retrospect both companies are probably considering why they ever included such a provision in their agreements in the first place.