How many times have you signed documents without looking at every word? We figure that because we're good and honest people, everyone else is and no one would try to trick us.

But, according to the Wall Street Journal companies are now getting their interns to sign non-compete and non-disclosure agreements. I don't have much of a problem with the latter, as long as they are reasonably crafted, but I have a huge problem with intern non-competes.

The very nature of an internship is to help a student gain experience so that she can go out and get a real job after graduation. If you are limiting that student's ability to get a job after graduation, you're not sponsoring an internship; you're offering a crappy summer job.

The Chief Executive of CastleBranch, Brett Martin, who heads one of these companies said, in response to a question about a specific student who received a follow-up letter reminding her about the non-compete:

"Our employment agreements are fair. They are not designed to limit the opportunities of young employees such as Delaney, but to protect ourselves and our partners from competitors who could gain access to our intellectual property and confidential business information. We have not, and will not, pursue any legal action against Delaney [the former intern]"

I disagree. Any non-compete for someone in a temporary job (which internships are, by definition) are unfair. Yes, she could have turned down the internship and found one elsewhere, but she undoubtedly wasn't expecting to be bound by such an agreement. I would have never thought to warn interns about non-compete agreements.

Non-competes are often non-enforceable. I'm not a lawyer and even if I was, I haven't reviewed this particular non-compete agreement, but Martin's statement that they wouldn't pursue anything against this former intern matched up against the letter she received reminding her of her obligation, suggests that they know it's not enforceable, but figure students won't have the money or knowledge to fight it.

And that's exactly what happened. Delaney Dunne took a job in another town so as to not violate the non-compete agreement. Enforceable or not, the employer won.

Employment Attorney, Donna Ballman, who brought this to my attention, points out that some people are doing things against this utter stupidity and overreach. She writes:

"My state's Senator, Marco Rubio (with whom I almost never agree, except now) has proposed a bill that would prohibit noncompetes for hourly employees. That would be a great start.  Democrats have repeatedly tried and failed to limit non-competes over the years, so maybe a Republican can get his colleagues to listen.

"Some states, like Massachusetts, have also banned non-competes for hourly and low wage employees. Illinois banned non-competes for low wage workers. California, Oklahoma and North Dakota ban most non-competes. There are lots of bills pending that would address problems with non-competes in various states."

Colleges and universities need to be on the look out for this and sever any relationship with companies who want to require non-compete agreements. Interns should think carefully before signing any document an employer puts before them (as everyone should). And we should all support legislation that prohibits non-compete agreements for hourly employees (which will include almost all interns).

Published on: Jul 5, 2019
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