PHIL 1404 Learning Journal Unit 4
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Jan 9, 2024
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Learning Journal Unit 4
Please read the case study entitled “Non-Compete Agreements” from the chapter 7 of the Business Ethics textbook.
Based on what you have learned in this unit, answer the following questions:
1.
Other than being punitive, what purpose do non-compete agreements serve when low-level employees are required to sign them?
2.
Suppose an executive chef or vice president of marketing or operations at Jimmy John’s or any large sandwich franchise leaves the firm with knowledge of trade secrets and competitive strategies. Should he or she be compelled to wait a negotiated period of time before working for
a competitor? Why or why not?
3.
What is fair to all parties when high-level managers possess unique, sensitive information about their former employer?
A non-compete agreement is a contract between an employer and employee that is enforced upon the termination of the employment relationship and forbids the person from working for a rival or working for a company that competes with their prior employer.
Low-level employees may be compelled to sign noncompete agreements to safeguard their employers' interests against former employees and stop them from disclosing trade secrets or sensitive information
about business operations, future goods, clients, pricing, strategies, and procedures. The agreement is also applicable when a business provides a specific good or service and is one of just two or three such businesses in a market (Byars et al., 2019).
Once the contract is signed, the low-level employees are forbidden from looking for better opportunities
in other organizations that offer an increase in benefits and compensation out of fear of being sued.
While it is perfectly acceptable for employers to require workers to uphold their duty of confidentiality and keep such sensitive information confidential (Byars et al., 2019). requiring an executive chef or vice president to wait a set amount of time before accepting a position with a rival organization would limit their capacity to look for employers with better working conditions, hindering their ability to advance their careers and enhance their lives.
I think it hinders a more competitive labor market, which is bad from an entrepreneurial aspect. Knowing trade secrets and competitive techniques is a valuable knowledgebase for the chef or vice president to launch his or her own business and be a better Entrepreneur.
According to The Impact of Non-Compete Agreements and their Enforcement | Econofact (2018), the contract is more in the employer's best interests because "Conditions under which workers sign the contracts are often not conducive to a true negotiation and may be contributing to a rise in employer market power and to depressed wage growth for the workers." The Impact of Non-Compete Agreements and their Enforcement | Econofact, 2018). Furthermore, if workers, both higher level and lower level employees, were able to make informed decisions about a non-compete agreement and negotiate higher compensation, these agreements could be valuable for both workers and firms and not
have negative implications both for workers' careers and for entrepreneurship. An employee must
refrain from taking any actions that would be against the interests of the employer. The worker must refrain from taking any action that benefits themselves or a third party, especially when doing so under duress.
would put the employer in a conflict of interest and without obtaining the employer's permission (Byars et al., 2019). It can be fair for all parties if, after the manager's employment ends, the employer applies for an interim injunction to prevent the former employee from using the confidential information to create an unfair competitive advantage. This is especially true when high-level managers have unique, sensitive information about their former employers (often referred to as a springboard injunction).
The employer can take advantage of the exit interview to remind a departing employee of his or her ongoing obligations relating to the employer's confidential information. For employees, it can be difficult
to distinguish between what is truly confidential information and generally the skills and knowledge they
have acquired over time (Six top tips to protect confidential information during and after employment, 2017).
References:
Free textbooks online with no catch
. OpenStax. (n.d.). Retrieved July 13, 2022, from https://openstax.org/details/books/business-ethics
Doyle, A. (2020, July 6). What is a noncompete agreement?
The Balance Careers. Retrieved July 13, 2022, from https://www.thebalancecareers.com/what-is-a-non-compete-agreement-
2062045#:~:text=A%20noncompete%20agreement%20is%20a,direct%20competition%20with
%20the%20employer.
Marx, R. N. and M., Nunn, R., Marx, M., Podgursky, C. K. and M., Koedel, C., & Podgursky, M. (2018, May 20). The impact of non-compete agreements and their enforcement
. Econofact. Retrieved July 13, 2022, from https://econofact.org/the-chilling-effect-of-non-compete-
agreements
Privacy and Data
. Shoosmiths. (n.d.). Retrieved July 13, 2022, from https://www.shoosmiths.co.uk/expertise/services/privacy-and-data
Six top tips to protect confidential information during and after employment
. Taylor Vinters. (2018, September 14). Retrieved July 13, 2022, from https://www.taylorvinters.com/article/six-
top-tips-to-protect-confidential-information-during-and-after-employment
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