Suicide Girls’ Model Contracts: Invalid
February 15, 2008
There are provisions of contracts referred to as “non competition clauses.” In many instances, producers or employers will attempt to narrowly define what the talent or employee can or cannot do when he / she is not working for that particular employer. In many instances, such clauses are invalid. But this is not always the case, and such a discussion is beyond the scope of this posting. In this instance,
A Los Angeles Superior Court judge has voided Suicide Girls’ modeling contracts, ruling that their exclusivity terms are too broad to legally keep models from doing outside modeling work. (Source)
In many instances, those wishing to challenge the provisions will argue that such restrictions are against public policy. But it looks like here that the judge felt the competition provisions were too broad to be enforceable.
March 18, 2008 at 10:00 pm
I went on the web to find out what is meant by “too broad to be enforceable.” I looked at the following sites: (http://en.wikipedia.org/wiki/Non-compete_clause) and (http://www.nysscpa.org/cpajournal/2007/1107/essentials/p56.htm).
I learned that noncompete agreements are designed to keep someone from working in competition with an employer after leaving employment there. This is deemed legitimate in the business world to protect employers since former employees might divulge trade secrets, client lists, or other sensitive business information. However, a noncompete agreement must not be so restrictive as to prevent someone from finding work at all. To be honored in court, the limitations in the noncompete agreement must be reasonable. The employee can be limited from competing in a reasonable geographical area, for a reasonable period of time, from doing work of a related nature, and/or from doing competing business with company clients when appropriate. As stated on the Wikipedia article, “…an individual can not be barred from carrying out a trade in which he has been trained except to the extent that is necessary to protect the employer.”
The CPA Journal article states that some courts will modify a noncompete agreement to make the limitations on the employee more reasonable and to limit its functions only as required for the employer’s protection. Yet, if the agreement seems to be so broad as to have been designed in bad faith, the court may simply not enforce the agreement.
After reading these articles, I understand why the models’ noncompete clause was not upheld in court.
I think it’s interesting that noncompete agreements require consideration on both sides, as all contracts do. The CPA Journal article points out that when a new employee signs a noncompete agreement, employment is the consideration they gain. If they sign the agreement after employed, the agreement may not be enforceable if they do not receive additional consideration – a salary increase or other additional benefit.
April 9, 2008 at 2:20 pm
I have never signed a noncompete agreement, but it makes sense that it should be reasonable for both parties. A company would want to protect their trade secrets while the employee needs some ability to find work in the same industry in which they are trained. Thanks to Kathy, I now know that a certain geographical area can be included in the terms of the noncompete agreement also.
April 11, 2008 at 8:30 am
Just as informational purposes… I work in the employment law group for a large corporation which covers the U.S. and 48 countries globally. The non-competition clause for our business is extremely important as we need to protect our product is very defined and limited. We enforce the non-competition clause in all our U.S. employment contracts and have been very successful. However, the non-competition clause enforceability in countries outside the U.S. is very different. Courts typically do not agree and are less likely to enforce non-competition clauses. Local laws in countries outside the U.S. are definitely designed to protect the employee much more than the U.S.