Houston Chronicle business columnist Chris Tomlinson recently interviewed me about how a woman’s search for a better job landed her in serious legal trouble.
The unfortunate story involves Maxie Foster, who worked for years as a receptionist to pay her way through beauty school to earn an esthetician license. She got a job at a Massage Envy franchise and worked there for 2½ years. Her legal problems began after she got another job at a similar business that paid her better money, which she needed to support her daughter.
FBE Ventures, which owns the Massage Envy franchises in Conroe and Tomball where Ms. Foster worked, filed a lawsuit against her and the new employer, which fired her just before Christmas to settle their part of the legal battle. Ms. Foster, now 27, is still fighting the $100,000 lawsuit and she’s prohibited from working in her field at any business located within 40 miles of her home, which is now a trailer on her parents’ property in Magnolia, a town north of Houston.
As Mr. Tomlinson wrote, Ms. Foster is one of millions of Americans who signed employment contracts that came with non-compete agreements they probably didn’t completely understand.
I represent high-level executives and non-compete agreements are a major focus of my work. I realize they can be an important tool for a company. They help protect a business’ trade secrets and can motivate an employer to invest in specialized training and provide stock options or equity in the company because it makes employees less likely to leave.
But non-competes used to apply primarily to well-compensated employees who had access to confidential information or received highly specialized training or equity in the employer. I’m talking about a company’s top executives and lead researchers. And although I understand their value, I often seek more flexible terms for my executive-clients.
I’m concerned about the expanded use of non-competes. What was once a tool essentially reserved for the executive suite has become a standard practice for the rank-and-file.
Ms. Foster says the company suing her didn’t pay for her training or her license. She says she didn’t have access to company trade secrets or equity and didn’t take any previous clients to her new employer.
“You’d think I’d murdered somebody. They came in with two corporate attorneys and tore me apart,” Ms. Foster told the Chronicle.
Ms. Foster’s lawyer, if she could afford one, likely could make a strong argument against the validity of the non-compete.
I’m not the only one concerned about the increasing use of non-competes. Earlier this year, I wrote about how the White House issued a 16-page report detailing how non-competes are becoming more commonplace among lower-wage employees.
I will say it again and again – please be aware of the real ramifications of signing a non-compete. Please consult an attorney if at all possible before signing any such agreement.