Back in January, Bill 51 was introduced in Maryland. It’s a bill that states that if you’re fired from your job and forced to collect unemployment benefits, then your non-compete agreement would be invalid.
It really baffles me that state governments across the country think it’s okay for someone to be fired from their job and forced to accept unemployment benefits when they could be working but can’t due to their non-compete agreement. I mean, isn’t it in the government’s best interest that if someone is fired from their job, then there shouldn’t be any roadblocks for that person to encounter when looking for work.
Evidently, this is the case though and it has been going on for at least 15 years. I think it’s 15 years since that’s when Arnold Arredondo and Rene Garcia signed their agreement with Reliable Fire in 1997 in 1997. They lost their case in court when they wanted to work on their own.
In any case, unemployment rises and this stupidity continues. Of course, the state government doesn’t ask itself what happens when people are fired from their job and have to collect unemployment benefits. You would think that they would want to update their employment applications to have just one question: Are you having trouble finding work due to your non-compete agreement?
Instead, the state governments across this country continue to side with companies and the special interest groups and lawyers who specialize in making non-compete agreements. As a result, the state government is throwing employees of their state under the bus since they’re telling employes that you have to accept being handcuffed to their job and forced to accept unemployment benefits if they are fired.
If you look at Bill 51 in Maryland, you can start by saying that the reason it started was because someone lost their job and was told that they could not go to court to fight it. They would have to go to arbitration, which is nothing more than a kangaroo court that would favor the company.
Not that going to court would be any better. Even though we have lawyers who specialize in non-compete agreements who say that the best place for this to be resolved would be in court so they could make their legal fees, what they of course leave out is that it would cost the employee over $10,000 in legal fees just to go to court. Who would have that kind of money especially if you’re making less than $50,000 a year.
In any case, another reason that there is opposition is because the fear is that the company would find a way to deny unemployment benefits to someone who is fired and on a non-compete agreement. As a result, the unemployment office would have a backload of people waiting to see if they could get their benefits.
If you look at Bill 51 in Maryland, it will only work going forward, not retroactive. So people who are on non-compete agreements now in Maryland would be stuck since the bill would not help them. If it becomes law, that would be in October.
Yet, the argument continues and we still have to ask the dumbest question of all: What are people supposed to do when they are fired from their job and forced to collect unemployment benefits because they can’t work in their industry for two years due to their non-compete agreement?
At this point, just let things continue? Let these people get unemployment benefits. Obviously, the government doesn’t have a problem paying it off since it’s more important to protect the interest of the company.
As I have said many times, when an employee leaves a company to go to a competitor, there is no way to measure the impact of that person leaving. There is only the possibility that something may happen. Katie Couric leaving NBC to go to CBS is the perfect example. Nothing happened.
Instead, it is the employee that suffers. That employee is on a non-compete contract that is nothing more than a career of indentured servitude. If that person is fired, he or she will be deprived of earning a living due to their non-compete agreement.
That person is forced to apply for jobs that they are unqualified for. That person will send resumes to positions that want some sort of experience. When that resume is sent, the person looking at the resume will be annoyed, saying why is that person applying to this job when I have 40 more resumes from people who have qualifications for this position.
As a result, the person remains unemployed for a long time and will have a harder time finding another job. In fact, there was an article on AP that said that if you are out of work longer than six months, then your chances of getting a job would be more difficult.
In the end, the government is stuck paying out unemployment benefits and the media and the people complain that unemployment is higher yet the state governments across this country continue to cry about this. No wonder the Silicon Valley in California is prospering since they are the only state that outlaws non-compete agreements.
Yes, the detractors will say that they have high unemployment rates also. But at the very least, residents in California will have nothing standing in their way if they have to look for another job since they have the freedom to work where ever they want. Yet in other states, people do not have that freedom because special interest groups such as the Hagerstown Chamber of Commerce and lawyers who specialize in non-compete agreements that run the government.
Yes, lawyers who specialize in writing non-compete agreements for companies have a role in this. Yet lawyers don't have non-compete agreements. They have the freedom of working for any law firm that they choose.