Noncompete Contracts Debated: The Rash of Publishing Buy Outs Is Calling Attention to Noncompete Clauses - but How Useful Are They?

Article excerpt

NEW YORK CITY-PSSSST. Hey, you. Are you well known in your industry? Privy to your company's latest battle plans? Holding a hot client list? Founder of a reputable new magazine?

If so, you probably stand among the increasing number of publishing executives being asked to sign employment agreements that include noncompete clauses. Given the heavy tide of sales, buy outs and mergers in business publishing today, this all-but-invisible legal tool is surfacing a bit more these days.

In fact, Gralla Publications, which publishes 19 titles, formally instituted a policy on january 1 requiring all of its executives, publishers, editors in chief and salespeople to sign employment contracts with the clauses.

"All it is intended to do is prevent someone from abusing experience and influence to harm Gralla," says Robert Boucher, president and CEO, noting that the language specifies that an employee can't go to work for a direct competitor.

Almost concurrent with the new policy, in fact, was the departure of Pete Shure, long-time meetings veteran and publisher of meeting News. In April, Shure went on to publish CMP's Business Travel News, and is reportedly working on a supplement that would compete in the meetings arena.

"There is a general concern about protecting trade secrets and client lists," says Paul Gajer, legal counsel for Gralla and an attorney at Rubin Baum Levin, a New York City law firm specializing in communications.

Do they work?

Noncompete clauses, in general, prevent the employee from working for the competition for up to five years. "You want to make them sit on the beach for six months or so," says one lawyer. …