Right-to-work laws and non-compete agreements both relate to arrangements between employers and employees regarding work prospects. Right-to-work refers to the absence of restrictions that could be placed on an employee's work opportunities by an agreement between a company and a labor union, while the non-compete agreement deals with restrictions on an individual's work opportunities established by a contract between the employer and the employee.
As a small-business owner, you may need to protect trade secrets, client lists or other sensitive information. You are entitled to ask employees or applicants to sign a non-compete agreement that forbids them from working for a company or starting a new company that competes with your business during a specified length of time after they leave your employ. The contract can even restrict their activities in the same industry or location. Because contracts are quid pro quo, you must offer the employee or applicant something of value -- a job or a monetary bonus -- in return for agreeing to this contract. You must limit the contract to a reasonable length of time, generally less than two or three years.
Advertisement Article continues below this adRight-to-work laws forbid employers and unions from making membership in a labor union, and paying dues and fees, a condition of getting or keeping a job. The Labor Management Relations Act, also known as the Taft-Hartley Act of 1947, and its subsequent amendments permit states to adopt laws specifying that employees are not required to join a union in order to get a job. If your company is in a right-to-work state and it has a union, your employees are not required to join, and those who do belong have the right to resign at any time and continue to be covered by any existing collective bargaining agreement. The National Right To Work Legal Defense Foundation lists 25 Right To Work states as of May 2013.
At-will employment applies to workers who don't belong to a union or who don't have a contract with your company. If you are an at-will employer, you can fire anyone for any reason -- and the employee can quit at any time -- as long as the dismissal doesn't violate any anti-discrimination laws. Firing is also illegal if you terminate an employee in retaliation for exercising his legal rights or for being a whistleblower.
Advertisement Article continues below this adIf you require employees to sign an employment contract, you are not an at-will employer. The contract helps you retain a reliable staff, and it guarantees employees that they will keep their jobs for the specific length of time spelled out in the contract. If you fire an employee in spite of the contract, he could have grounds to sue you. Even whistleblowers who report company violations are protected against retaliation if they have a contract. A fired employee who sues you for breach of contract could ask for his old job back or could ask for reimbursement for lost salary and medical or legal expenses and even punitive damages.