Labor & Employment Law

Even hair stylists and camp counselors sign noncompete contracts, leading to increased litigation

Noncompete agreements are spreading beyond the high-tech and sales fields to professions such as hair stylists, camp counselors, yoga instructors and exterminators.

As noncompete clauses proliferate, at least one lawyer has seen an increase in litigation to enforce the agreements, the New York Times reports. “Companies are spending money, hiring lawyers, to go after people—just to put the fear of death in them,” Manhattan employment lawyer Wendi Lazar told the newspaper.

A hair salon in Norwell, Mass., obtained an injunction requiring hairstylist Daniel McKinnon to stop working at a nearby salon because he had signed a noncompete that barred him from working at any salon in nearby towns for one year.

After the ruling, McKinnon survived for a year on unemployment benefits of $300 a week. “It was pretty lousy that you would take away someone’s livelihood like that,” he told the Times. “I almost lost my truck. I almost lost my apartment. Almost everything came sweeping out from under me.”

A proposed bill in Massachusetts aims to change the situation for employees like McKinnon. The bill, which passed a House committee, would ban most noncompetes while including restrictions to help protect the loss of trade secrets when employees change jobs.

Currently only California and North Dakota ban noncompete clauses, the story says. Courts in most states won’t enforce the deals, however, unless there is a legitimate business reason for the agreement, it is narrowly tailored, and it is reasonable in scope and duration.

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