Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 2

The court held that ASM's agreement to either provide notice of termination or pay an agreed-on sum in lieu of notice was not adequate consideration for the noncompete, because a prior decision interpreted the Covenants Not to Compete Act as requiring that "the consideration given by the employer in the otherwise enforceable agreement must give rise to the employer's interest in restraining the employee from competing," and the noncompete "must be designed to enforce the employee's consideration or return promise." Do you agree with the court's interpretation of the Covenants Not to Compete Act? For example, should an employer be able to extract a binding noncompete in consideration for payment of a bonus? A promotion? A salary increase? If not, why not?