The broad noncompete agreement that Halifax Media employees are being asked to sign from California to Florida may hurt journalists and journalism, but it appears enforceable in most of the states where former employees of the New York Times Regional Group work.
UPDATE: Late Tuesday evening, Halifax told former NYTRG employees that the policy would not apply to them.
The agreement limits those who sign it from working for another media company — in print, online or on the air — for two years in markets that Halifax currently serves or plans to serve. That agreement remains in effect even if Halifax fires the employee.
Noncompete agreements like this one are state-specific, said David Ardia, assistant professor at the UNC School of Law. “States can themselves decide whether or not noncompete agreements are valid in their jurisdiction.” And if they’re valid, they decide how they are enforced. “So a one-size-fits-all approach is typically not what employers would be doing with noncompetes if they have employees in multiple states.”
In fact, one of those states — California — where Halifax has three papers, does not allow this type of noncompete agreement, though employees at The Press Democrat in Santa Rosa, North Bay Business Journal and Petaluma Argus-Courier have been asked to sign them, according to reports.
The remaining states — Alabama, Florida, Louisiana, North Carolina and South Carolina — where Halifax bought NYT regional papers are in the south, which are generally “happy to enforce noncompetes,” Ardia said.
“It’s the outer limits of what Florida law might consider enforceable,” said Alison Steele, a partner with Rahdert, Steele, Reynolds & Driscoll, which represents The Poynter Institute.
Because noncompete agreements are more common for broadcast journalists, the union representing many of them has “made it a priority in contract negotiations,” said Mary Cavallaro, assistant national executive director for news & broadcast for the American Federation of Television and Radio Artists.
It has also successfully advocated for legislation to make noncompetes unenforceable in New York, Massachusetts, Maine, Connecticut, Illinois, Arizona and the District of Columbia.
Though these contracts are bound by state law, the meaning of “markets” is no longer limited simply to local communities. “With the dawn of all these platforms and people’s ability to access media from anywhere, the issue is becoming more complicated than geographical boundaries,” Cavallaro said by phone.
Where they are enforced, states must determine that noncompetes are reasonable from the employer’s standpoint but also from the employee’s, and enforcement can’t violate public policy. In this case, public policy may extend to the First Amendment.
Is the noncompete reasonable?
“This reasonableness requirement looks at the purpose of the noncompete, and if there isn’t a business reason, if it’s just sort of punitive, then the courts are gonna be less likely to enforce the noncompete agreement,” Ardia said by phone.
“A noncompete clause for a small-market newspaper reporter making $30,000 a year? Or less? That seems unnecessarily harsh, putting young journalists at a significant disadvantage in a brutal job market,” said Poynter’s Kelly McBride by email.
One factor in determining whether it’s reasonable is whether employees can exercise choice. How long did the employees have to review the agreement? Was there coercion? If the state has no restrictions on firing, then it would not be considered coercion to be told you would be fired for not signing, Ardia said.
Does it violate public policy?
One “broad limitation in the public policy standards is you can’t have a noncompete agreement that makes it impossible for someone to earn a living or practice their trade at all,” said Ardia.
Noncompetes have “had a horrible impact” on journalists’ ability to earn a living, Cavallaro said.
Given the difficulty of finding a job (in journalism or otherwise) and the difficulty of moving in a frozen real estate market, this concern seems especially relevant to those wanting to challenge the noncompete’s enforceability.
In Tennessee, a court decided in 2008 that a noncompete agreement could be unenforceable where it impinges on one’s freedom of speech, Ardia said.
“It’s detrimental to the public interest to be forcing journalists, at a time when we need more journalists practicing the craft … to have these kinds of agreements in place to make it so someone cannot leave their current employer and engage in news reporting,” Ardia said. “That diminishes our access to information healthy to a functioning society.”
Despite those potential challenges, the Halifax agreement “doesn’t look to be so far outside the mainstream that it would on its face be unenforceable,” Ardia said.
“If I were advising an employee, I’d say, ‘Do not sign this,’ ” said Steele. “Two years is a long time to remain out of work. … Where’s the person who leaves this company supposed to get a job? Where’s the person who’s fired from this company supposed to get a job?”
Steele and Ardia both said employees should consult a lawyer before signing a document like this one. Steele also suggested employees ask for an extended deadline if they haven’t yet had the opportunity to consult a lawyer.