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Some companies in fields where skilled employees

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Some companies in fields where skilled employees [#permalink]

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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 favourable 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 companies consider their employees established relationships with clients and other people outside the company to be valuable company assets
[Reveal] Spoiler: OA

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Re: Some companies in fields where skilled employees [#permalink]

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New post 02 Apr 2015, 23:47
souvik101990 wrote:
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 favourable 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 companies consider their employees established relationships with clients and other people outside the company to be valuable company assets


Time : 1:37

(A) Many companies will not risk having to become involved in lawsuits, even suits that they expect to have a favourable outcome. -Correct. Even though the company knows that the courts will rule in their favour, they still have to incur the costs of a lawsuit.

(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 - OFS. Doesnt tell us why cos do not hire employees during their non-compete contract period

(C) Most companies that require their employees to sign agreements not to compete are aware that these documents are not legally binding - We dont have to know about the previous company but the future company which doesnt hire the people during their non-compete period. Irrelevant

(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 - OFS. We are concerned about those people who sign the agreement but do go to other cos for employment

(E) Many companies consider their employees established relationships with clients and other people outside the company to be valuable company assets - I don't think any co would consider the relationship between its employees and their past cos as a valuable asset.

Answer: A

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Re: Some companies in fields where skilled employees [#permalink]

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New post 04 Apr 2015, 03:53
I dont understand how A.. According to agreement, the employee is signing it. So if the employer has to sue, it has to sue only the employee not the competing firm. But D states that the new employer will not hire the employee because they feel that the employee will not be reliable.. Please explain..

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Re: Some companies in fields where skilled employees [#permalink]

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New post 04 Apr 2015, 08:13
sheolokesh wrote:
I dont understand how A.. According to agreement, the employee is signing it. So if the employer has to sue, it has to sue only the employee not the competing firm. But D states that the new employer will not hire the employee because they feel that the employee will not be reliable.. Please explain..


sheolokesh Option A never states that the new employer wont employ because the employee is unreliable. Option A only states that since the new employer doesnt want the hassle of a lawsuit or doesnt like the idea that its name will be dragged to a lawsuit, it wont hire the employee who has a binding contract.

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Re: Some companies in fields where skilled employees [#permalink]

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New post 05 Apr 2015, 01:37
AmoyV wrote:
sheolokesh wrote:
I dont understand how A.. According to agreement, the employee is signing it. So if the employer has to sue, it has to sue only the employee not the competing firm. But D states that the new employer will not hire the employee because they feel that the employee will not be reliable.. Please explain..


sheolokesh Option A never states that the new employer wont employ because the employee is unreliable. Option A only states that since the new employer doesnt want the hassle of a lawsuit or doesnt like the idea that its name will be dragged to a lawsuit, it wont hire the employee who has a binding contract.



I hope you misunderstood my explanation..
According to agreement, the employee is signing it. So if the employer has to sue, it has to sue only the employee not the competing firm. So competing firm dont have to worry about the lawsuit.. That makes option A not good..

Option D states that the new employer will not hire the employee because the employer feels that the employee will not be reliable as the employee has broke the promise..

This is my confusion..

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Re: Some companies in fields where skilled employees [#permalink]

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New post 05 Apr 2015, 08:12
sheolokesh wrote:
AmoyV wrote:
sheolokesh wrote:
I dont understand how A.. According to agreement, the employee is signing it. So if the employer has to sue, it has to sue only the employee not the competing firm. But D states that the new employer will not hire the employee because they feel that the employee will not be reliable.. Please explain..


sheolokesh Option A never states that the new employer wont employ because the employee is unreliable. Option A only states that since the new employer doesnt want the hassle of a lawsuit or doesnt like the idea that its name will be dragged to a lawsuit, it wont hire the employee who has a binding contract.



I hope you misunderstood my explanation..
According to agreement, the employee is signing it. So if the employer has to sue, it has to sue only the employee not the competing firm. So competing firm dont have to worry about the lawsuit.. That makes option A not good..

Option D states that the new employer will not hire the employee because the employer feels that the employee will not be reliable as the employee has broke the promise..

This is my confusion..


D never states what you think it is stating. D says that the employees themselves will not go against their contract and volunteer to fulfill their contract.

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Re: Some companies in fields where skilled employees [#permalink]

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Re: Some companies in fields where skilled employees [#permalink]

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New post 13 Nov 2017, 21:08
Only A can gives an explanation.
D is confusing, but D, like C and E, intensifies the paradox.

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Re: Some companies in fields where skilled employees [#permalink]

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New post 14 Nov 2017, 04:31
souvik101990 wrote:
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 favourable 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 companies consider their employees established relationships with clients and other people outside the company to be valuable company assets


I thought 'courts are ruling that...' means court has annulled the law. This made me diverge from A. Can someone please explain what exactly does 'ruling..' means if that doesn't signify the annulment of the law passed ?
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Re: Some companies in fields where skilled employees [#permalink]

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New post 17 Nov 2017, 20:52
One seminar episode hosted by ninjagmat has once published this question. I do not know that gmat experts do care about Aristole questions on the mainstream.

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Re: Some companies in fields where skilled employees [#permalink]

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New post 17 Nov 2017, 20:54
sheolokesh wrote:
I dont understand how A.. According to agreement, the employee is signing it. So if the employer has to sue, it has to sue only the employee not the competing firm. But D states that the new employer will not hire the employee because they feel that the employee will not be reliable.. Please explain..


D is a double-negative claim => D makes the paradox more complex.
You have already known the rest; all are eliminated by using POE>

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Re: Some companies in fields where skilled employees   [#permalink] 17 Nov 2017, 20:54
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