I’ll start by reviewing the standards of the so-called non-compete agreement because this question is bothering me. Does Shea Allen have any confidential information about her station just because she worked in the newsroom? I’m gonna say no.
Now, I’m going to ask the second question. Let’s say that there is no non-compete agreement and Shea goes to work for another TV station in Huntsville, Al. Is she going to take any viewers and advertisers away from that station? Maybe? Do we really know? Well, a lawyer who specializes in non-compete agreements will probably be screaming at me at this point and say Rick, we can’t take that chance because she may take one viewer or advertiser from that station. Yes, that is the standard.
Okay, then here is my question. What kind of impact did Katie Couric have when she left the Today Show and went to CBS? Yes, I can hear the non-compete lawyer screaming back at me that that has nothing to do with this.
It has everything to do with this. This is the problem about non-compete agreements. No matter how you look at it, all of them are built on the same foundation. If someone leaves a company to go to a competitor, then disaster will strike. The problem though is that you can’t measure that unless that happens. That’s when the lawyers will start screaming that this is about trade secrets which in this case are viewers and possibly advertisers.
This is the problem about non-compete agreements. The lawyers say that one size fits all but when we really look at the non-compete agreement in Ms. Allen’s case, I think we can see that it really doesn’t fit. We’d like to say that it will fit but seriously folks, the point of a non-compete agreement is how much impact will someone have when they go to work for a competitor. In Ms. Allen’s case, not enough impact that thousands of viewers will turn off the station and go to the station that Ms. Allen will work at. As far as the advertisers are concerned, maybe you can make that argument about someone like Howard Stern. Not Shea Allen.
This is what happens when something isn’t regulated by the government and the results of it. What we have done here is that we trust the company and the non compete lawyer to do the right thing and just say that Shea Allen should be on a non-compete agreement. We make the excuse that the trade secret in this case is viewers and advertisers but it seems very weak now that we look at it, doesn’t it?
The worst part is that we are allowing this piece of paper to deprive Ms. Allen of earning a living at another station in her area after she was fired from her station. She went to school for this. We’re at the very least forcing her to move all because she is on a non-compete agreement and the only reason she is on one is because there is a possible threat that she will take viewers and advertisers with her to another station. Yes, it's okay to fire someone, give them a small severance package, and force them to move or collect unemployment benefits. Since the government won't regulate non-compete agreements, then they obviously don't have a problem paying out the unemployment benefits even though Shea could get a job in her area.
Now think back to the contract Warren Stephens tried to put on journalists after he bought 16 editions of the New York Times. The contract stated that the journalist could be fired at any time for any reason and can’t work at a newspaper, a magazine, a radio station, or a TV station where Halifax has offices. Why is it so important to keep a journalist from working at a radio or a TV station or another publication? Where is the impact? How much harm will that cause Halifax Holdings? Yet this is the standard for new journalists who go to work for Halifax Holdings.
This comes under the standard that a judge can blue pencil this agreement because the non-compete lawyer can make it as harsh as he or she wants. Maybe the judge will just throw it out. Or the judge will say that a five year non-compete agreement in Indiana is reasonable. Yes, this is the game that is played with peoples lives who are trying to earn a living.
This is what happens when we make non-compete agreements the law of the land. We think we can put anyone on this because of the possible harm that it will do and no one will ask why this is happening.
It’s sad because this has gone on for 15 years. We don’t question it. We just put someone on this because the company demands it because they have rights and the employee doesn't have rights.
In the end, the non-compete lawyer will say hey, if Ms. Allen has a problem with this, then she can take it to court. No need to regulate it. Of course, that same lawyer won’t say that it’s $10,000 and sure, maybe her employment lawyer can make a case for her. There is no guarantee because she signed a legal document. The judge can still rule either way.
Which brings us back to the bigger question. Should Shea Allen be on a non-compete agreement? Should journalists and TV reporters in local markets be put on a non-compete agreement? You figure it out. When you do, ask yourself when the time will come when the government will start regulating this.
Rick Holman