‘You’ll never work in this town again!’ — now what?

Click for story
Click for story

You’ve just been fired, or quit, and it’s time to job hunt again. But on your way out the door, your new former employer confronts you with an uncomfortable reality that sounds something like this: “You’ll never work in this town again.”

What now?

It’s not an idle threat. Noncompete agreements used to be for executives or highly paid engineers with brains full of intellectual property. But increasingly, corporations are shackling all kinds of workers—hairdressers, tutors, camp counselors—with employment agreements that ban them from working for competitors for a year or two after terminating employment.

The agreements often mean newly unemployed workers can’t get a job in their chosen field without moving away from their hometowns.

“It wasn’t mentioned until I was filling out the tax paperwork, and it was treated like it was no big deal. … I didn’t even give it a second thought,” said one out-of-work tutor who asked not to be identified because she thought it would hurt her job prospects. “They did make sure to remind me about it when I quit working for them. … I was told I could not work for a competing tutoring company and I could not privately tutor students.”

Noncompetes have been spreading through industries for years, but are getting a closer look recently. In April, Massachusetts Gov. Deval Patrick proposed banning some kinds of noncompetes in the state. Some in the tech community say Massachusetts is losing out on tech start-up money to California, which already bans many types of noncompete agreements.

“The opposition likes the status quo because it’s often a tool for wage suppression,” wrote Bijan Sabet, a Boston-based venture capitalist, in support of the Patrick’s proposal. “Non-competes stifle innovation because the companies can’t hire the best talent. Silicon Valley companies hire the best people without limitation. It’s a big problem if you can’t hire the best and brightest.”

READ THE REST OF THIS STORY AT CNBC.COM, where it was originally published.

Sign up for Bob Sullivan’s free email newsletter.

Don’t miss a post. Sign up for my newsletter

About Bob Sullivan 1637 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.