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Two months after Patrick McCullough lost his $60,000-a-year job installing computer networks for law firms, he’s having a hard time getting work — even though he’s had job offers. McCullough’s former employer is threatening to enforce a so-called “noncompete” agreement that bars him from working for anyone who provides legal services within 150 miles of his home. He said the ex-boss reminded him of the pact after he’d been seen attending a law firm’s pizza party. “I’m basically shut out of my industry,” said McCullough, 33, of Cincinnati. “They should allow me to earn a living.” Noncompete agreements became increasingly popular during the dot-com boom, and workers hardly gave them a second thought during that heady period. Now they are presenting a barrier to finding new jobs in a much cooler economy. Employers say the contracts legitimately protect them from losing trade secrets, clients or money invested in training their workers. Critics say noncompete and confidentiality agreements are used unfairly to prevent people from finding better jobs. Massachusetts Secretary of State William Galvin said his office is fielding more complaints from fired workers who can’t get jobs because they signed noncompete contracts without considering the implications. “The propensity has been to stick these agreements before anyone getting a job,” Galvin said. “People shouldn’t need to go to court just to fight to get the right to seek employment.” Employers have good reason to fear the damage a former employee can do to their businesses these days, said Catherine Reuben, a Boston attorney who represents employers. The Internet makes it easy to download a company’s client lists or to send trade secrets across the country in an instant. Companies that once limited noncompete agreements to top executives, salesmen and research and development personnel are now asking rank-and-file workers to sign them, Reuben said. “I have seen more companies saying, ‘I require it of everyone’,” Reuben said. More companies are also trying to make them stick. Telecommunications giant Sprint Corp. used a noncompete agreement last year to prevent its chief technology officer, Marty Kaplan, from taking company secrets to rival Worldcom Inc., which had offered him a job as president of operations. Wal-Mart sued its competitor Amazon.com in 1998 because the online bookseller had hired 15 of its inventory managers, who were familiar with its confidential computerized merchandising and distribution systems. The case was settled out of court. Carl Khalil, a Virginia Beach, Va., corporate attorney, offers advice on the Internet on how to escape the agreements. He says he hears from about 5,000 people a month looking for help. Many of those who come to him are baffled by the complex web of state law and court decisions that govern the agreements, he said. In Wisconsin, a noncompete agreement that’s too broad will be struck down by the court, but Michigan courts will enforce broad noncompete agreements after narrowing their scope, Khalil said. California, Colorado, Montana and North Dakota severely restrict the agreements. Maine and Massachusetts exempt broadcasters from them, while the rules vary for doctors from state to state. Only lawyers are exempt from noncompete agreements in every state, Khalil said. Getting fired is no guarantee in most states that employees can break their noncompetes, Khalil said. “The general rule in New York is that an employee who is fired without cause — without wrongdoing by the employee — will typically be able to escape from his noncompete,” said Khalil. That holds true for Arkansas and Illinois, as well. In several other states, being fired without cause is only a factor making it more likely that employees can escape from a noncompete, he said. Those include Indiana, Iowa, Massachusetts, Missouri, Pennsylvania and Texas. Mississippi and Minnesota courts say an unfair firing can make a noncompete unenforceable, Khalil said. The legal patchwork and evolving case law make it hard for both employees and employers to know their rights. On June 29, the Louisiana Supreme Court effectively struck down noncompete agreements except when employees leave to run their own business. John Castelano, a St. Petersburg, Fla., private investigator, is trying to get out of a noncompete agreement with a former boss who fired him. “They’re going to use the noncompete to make sure I don’t work for anyone else,” he said. “This is scaring the hell out of me.” Castelano has a wife, four kids, $500 in monthly rent and a $400 car payment to worry about. To make ends meet, he’s making pizzas and picking up a few freelance investigation jobs. “Signing a noncompete and knowing what you’re getting into are two different things,” he said. “But you want the job so bad. I’ve got four mouths to feed. I’ll sign anything.” Copyright 2001 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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