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# Some companies in fields where skilled employees are hard to

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CEO
Joined: 17 Nov 2007
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Concentration: Entrepreneurship, Other
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Some companies in fields where skilled employees are hard to [#permalink]

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23 Mar 2008, 12:38
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Some companies in fields where skilled employees are hard to find make signing an agreement not to compete a condition of employment. In such an agreement the employee promises not to go work for a competing firm for a set period after leaving his or her current employer. Courts are increasingly ruling that these agreements are not binding. Yet paradoxically, for people who signed such agreements when working for competing firms, many firms are unwilling to consider hiring them during the period covered by the agreement.

Which one of the following, if true, most helps to resolve the paradox?

(A) Many companies will not risk having to become involved in lawsuits, even suits that they expect to have a favorable outcome.
(B) In some industries, for example the broadcast media, companies main source of new employees tends to be people who are already employed by competing firms.
(C) Most companies that require their employees to sign agreements not to compete are aware that these documents are not legally binding.
(D) Many people who have signed agreements not to compete are unwilling to renege on a promise by going to work for a competing firm.
(E) Many companied consider their employees established relationships with clients and other people outside the company to be valuable company assets.

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Re: CR: an agreement not to compete [#permalink]

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23 Mar 2008, 13:06
is it A? the paradox is though courts are ruling in favor of employees, the companies are not willing to hire them

I see only A supporting it. Rest of them seem to be noise or not apt.
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Re: CR: an agreement not to compete [#permalink]

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23 Mar 2008, 18:05
Conclusion: Many firms are unwilling to hire prospective candidates who signed the non competing agreement.
The answer choice that supports this is to do with why emploeer is not hiring candidates with non-competing agreement signed.

(A) Many companies will not risk having to become involved in lawsuits, even suits that they expect to have a favorable outcome. [Hold it – This choice makes it clear why the employer is unwilling to hire]

(B) In some industries, for example the broadcast media, companies main source of new employees tends to be people who are already employed by competing firms. [This weakens the conclusion – eliminate it]

(C) Most companies that require their employees to sign agreements not to compete are aware that these documents are not legally binding. [Fine – but this doesn’t address paradox – eliminate it]

(D) Many people who have signed agreements not to compete are unwilling to renege on a promise by going to work for a competing firm. [What individuals are doing is irrelevant – we have to see why employer is not hiring – eliminate it]

(E) Many companied consider their employees established relationships with clients and other people outside the company to be valuable company assets. [What many companies want is out of scope – eliminate it]

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Re: CR: an agreement not to compete [#permalink]

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23 Mar 2008, 19:02
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A for me, because it helps to explain that paradox by stating that Many companies will not risk having to become involved in lawsuits, even thouch they expect to have a favourable outcome.

The other options don't help to explain the paradox in anyway.
CEO
Joined: 17 Nov 2007
Posts: 3589
Concentration: Entrepreneurship, Other
Schools: Chicago (Booth) - Class of 2011
GMAT 1: 750 Q50 V40
Followers: 519

Kudos [?]: 3327 [0], given: 360

Re: CR: an agreement not to compete [#permalink]

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23 Mar 2008, 21:17
Thanks!
OA is A
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Re: CR: an agreement not to compete [#permalink]

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26 Mar 2008, 09:52
A
thanks
Re: CR: an agreement not to compete   [#permalink] 26 Mar 2008, 09:52
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