Avoid Magical Thinking About Your Non-Compete Status (Yes! They are STILL enforceable in most states.)

“Magical Thinking” can be fun…nothing against Santa and the Tooth Fairy.  

It can also be quirky. I have a friend who wouldn’t leave his seat during a baseball game if his team was on a rally. His magical thinking had convinced him that getting up to get a beer would influence the positive flow of the game and he might be responsible for his team’s loss.

There is no harm in superstitions or fantastical beliefs like these. But sometimes, magical thinking can be dangerous. 

Unfortunately, we talk to a lot of job candidates who practice magical thinking when it comes to their non-compete status. These folks like to cross their fingers and hope that they didn’t sign a non-compete with their current company… or that if they did, it won’t apply to their new job…. or if it does apply, their current company won’t hold them to it.

That is some risky magical thinking and can actually slow your career growth and income.

Some employees have clung to what they heard early in 2024, about new legislation making non-competes unenforceable  for most workers. They remember the good news that the law would immediately nullify their existing non-competes, while tuning out the reverse news from August about the federal decision to overturn that law, leaving non-competes in place. 

In April 2024, the FTC did attempt to curb non-competes for most workers, but a federal court set aside the ruling, so as of this writing, there is NO FTC ban across the board for non-competes. Read this article for details on the current legislative status.

I’m not issuing a blanket indictment on non-competes; if they are reasonably written, they can provide fair protection for employers who have invested a great deal of time and money into their employees. (Of course, some are ridiculously restrictive, but that’s a topic for another day). 

It’s just that, too many employees don’t even know if they’ve signed a non-compete, so they are in the dark about the kind of jobs they are prevented from taking. That limitation can have a direct effect on your earning potential if you can’t parlay your experience into an upward career move at another company in a similar market. If a non-compete blocks you from moves within your market, you may need to plan for an industry or function change to achieve the growth you are working toward.

Below are some common candidate responses when asked about the existence and content of their non-competes.

1) I can’t ask HR for a copy or they’ll know I’m looking.

You certainly can ask HR for it, and the time to do that is now, before you actually are interviewing. Be confident and transparent. You can honestly say, “I’m not looking at making a change right now, I’m just organizing all of my financial documents and contracts and want to add these to my records. And now, you can honestly add, “I just read an article that advised me to collect and review all of my legal documents on a regular basis, and it specifically mentioned employment documents such as non-competes.”

2) I don’t think I signed one.

If you don’t know if you signed one, see #1. And, if you truly believe you can’t ask HR without jeopardizing your current job, ask your colleagues, both current and former, if they recall signing anything and if they will share a copy.  Here at Cambridge, we keep a database of non-competes so that we can sometimes let candidates know if others in their company have signed something. It’s not a substitute for your own fully executed document, but it’s a start. 

Get the answer.

3) I signed one, but I don’t think it will apply here. 

Get a copy of the agreement so you can send it ahead of an interview to your recruiter. They can send it on to the company and their legal team can tell you whether or not the contract is prohibitive. This could save all parties a lot of time and expense.

4) I signed one and it probably applies, but my company won’t come after me. 

This could be another bit of magical thinking. You may have a great relationship with your boss, but management changes. And, just because your company didn’t chase down the last guy who left for a competitor, doesn’t mean they won’t come after you. 

The good news is that if you can provide your potential employer with a copy of your non-compete early in the process, they can often work with you to find a solution.

5) My state doesn’t enforce non-competes.

If you live in a state like California and are interviewing with a California firm, you are right; you don’t have to worry.  Check out this non-compete law tracker to see where your state stands.

The bottom line: avoid magical thinking and face the facts. You may have signed a non-compete that will block some potential positions, but by obtaining and reviewing it, you will be ready to discuss the terms early and confidently with potential employers.

PS: Of course, when you sign a new non-compete, be sure to save it somewhere easily accessible so you can share it quickly with a prospective employer in the future.

Jennifer Graham

Cambridge Consulting Service, Inc.

www.cambridgesearch.com