QUESTION ONE (1)
Jones may have claims against the enforceability of his contract with the Suburban Engineering Company (SEC) in regards to consideration and unconscionability of the non-compete clause. Once those issues have been settled, the court will also need to determine if SEC breached its duty of “good faith”.
A. Enforceability Issues
I. Consideration
Jones’ first claim against SEC is that the non-compete clause lacked consideration. Although courts often question the enforceability of such a clause, Jones’ claim will probably not be accepted by the court.
The idea of consideration falls within the Justification Principle. This requires that there be no reason not to enforce the promise. Regarding non-compete clauses, there are competing views as to their enforceability. The main question is whether consideration is given. Is subsequent employment sufficient or must there be an independent consideration as to treat the non-compete clause as a separate promise? In order for a contract’s consideration to be sufficient, there must be a detriment to the promisee or a benefit to the promisor. Some courts hold that these clauses fall within the bargained-for exchange of the contract and will constitute just one component of an employee’s promise in exchange for the bargained-for contract from the employer (assuming no bargaining disparity exists). Judge Moyer reasoned that, “the employee’s assent to the agreement is given in exchange for forbearance on the part of the employer from terminating the employee.” (Lake Land Employment Group of Akron v. Columber).
However, dissenting opinions favor the idea of giving additional consideration in exchange for a non-compete clause. This view questions whether the employer has in fact relinquished anything at all. If the employer has the same preexisting right to fire an employee, then nothing has been lost to the