Ties That Bind: Draconian Employment Contracts Are Creating a New Form of Indentured Servitude.

AuthorRussell-Kraft, Stephanie

In the summer of 2016, Adam Merberg was offered a job as a data scientist at AbleTo, a behavioral health care company based in New York City. After he verbally accepted the job offer, a corporate recruiter sent him an email letting him know the company would be running a routine background check. "Also attached is a confidentiality agreement," the recruiter wrote. "Please review, complete, sign, and return to me as soon as possible."

The agreement included a non-compete clause prohibiting Merberg from working at any of the company's competitors for twelve months after leaving. Merberg, who had recently completed a Ph.D. in mathematics, didn't consider how this might later affect him.

At the end of 2017, he was offered a data scientist job at another health care company, called Quartet Health, also based in Manhattan. Along with different and more interesting responsibilities, the position came with a $25,000 annual pay raise. By that time, Merberg knew there was "some degree of rivalry" between the two companies and started to worry about the agreement he had signed.

"I did do my due diligence and ran things by an employment attorney, and he assured me that I was on solid legal ground," Merberg says in an interview.

But when AbleTo learned of Merberg's plans to take a job at Quartet, it summoned him to a meeting with the company's chief executive officer. "He just told me, 'We have the best lawyers, and our lawyers told us we have an open and shut case,'" Merberg recalls of the meeting. The next day, he received a cease-and-desist letter from AbleTo.

"If you proceed to become employed by Quartet Health, please be assured that AbleTo will take all steps necessary to enforce and protect its rights with respect to your continuing obligations to the Company, including, but not limited to, initiating an action in court to secure your compliance and obtain damages related to any misconduct," the letter said.

Merberg went back to his lawyer, who tried working out an agreement between the two companies. But eventually, faced with the risk of legal action, Quartet rescinded its offer. (Quartet declined to comment for this article. AbleTo did not respond to requests for comment.)

As I listened to Merberg recount his ordeal on a recent phone call, waves of deja vu came over me.

Nearly three years ago, I left a staff reporting job at the legal news site Law360 to take on a reporting role at Reuters. When I applied for the new job, I didn't know that my employment contract with Law360 included the provision that I couldn't work for another company "providing legal news and data services" for an entire year after leaving.

Two weeks after I started my new job, Law360's lawyer sent a letter to Thomson Reuters' general counsel, alleging that I had access to "critical and sensitive confidential and proprietary information." The letter asked the Reuters lawyer to "take immediate steps" to ensure I didn't disclose any of these trade secrets. Two days later, I was fired. My case was highlighted in an article on non-compete clauses in The Wall Street Journal.

Merberg and I are not alone. In 2016, the Obama White House...

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