SBANC
Newsletter
September
12, 2006
Issue
438-2006
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QUOTE
"If
ethics are poor at the top, that behavior is copied down through
the organization."
-- Robert
Noyce
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FEATURE
PAPER
You Belong to
Me: Employer Attempts to
Keep Employees from Quiting to Work for Competitors Via
Bob-Compete Agreements in Employment Contracts
The
following paper was presented at the 2006 Allied Academies Conference.
It was written by Lara L. Kessler, Anna N. Bass, and John W.
Yeargain of Southeastern Louisiana University.
Abstract
At
one point in time, employees remained with one employer for most
of their careers.
Today, employees are more mobile and are likely to have several
employers over the course of their
careers. Because of this increased mobility, employers are concerned
that former employees will
use the knowledge and skills they learned while in the employer’s
service to compete with their
former employer. Thus, employers are faced with the dilemma of
how to protect themselves from
the competition of former employees. In order to protect their
interests, employers often include a
covenant not to compete in their employment contracts. It is the
authors’ contention that noncompete
agreements are anti-competitive and contrary to the free enterprise
system. Because some
state courts have also taken this position, some companies have
sought more effective ways to
collect for the expense of training an employee while permitting
the employee to leave and
immediately compete.
Introduction
Covenants
not to compete in employment contracts allow employers to prevent
or restrict
employee competition when the employer/employee relationship is
terminated. Employers in a wide
variety of industries frequently use these non-compete agreements
to prevent former employees
from using the knowledge and skills obtained during their employment
to compete with their former
employer. Employers believe that the knowledge and skills they
impart to employees belong to the
employer’s business and that consequently, they should be
allowed to prevent employees from using
that knowledge to compete with them (Stone, 2002).
Although many states recognize narrowly drawn covenants not to
compete, some states
refuse to recognize non-compete agreements that restrain employees
from working for their former
employer’s competitors, unless such an agreement is necessary
to protect the employer’s trade
secrets (Muggill v. Reuben H. Donnelley Corp., 1965). These states
strongly favor an employee’s
right to freely pursue a livelihood and have strong public policies
against covenants that restrain that
right (see, Cal. Bus. & Prof. Code 16600-602; Swat 24 Shreveport
Bossier, Inc. v. Bond, 2001).
Read the Entire Paper...
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CONFERENCES
AMA
|
| Who: |
Atlantic
Marketing Association
|
| What: |
Annual
Meeting
|
| Where: |
Francis
Marion Hotel in Charelston, South Carolina, USA |
| When: |
September
27-30, 2006 |
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|
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FSF
|
| Who: |
Swedish
Foundation for Small Business Research
|
| What: |
The Northern Lights Symposium 2006
|
| Where: |
Lulea, Sweden |
| When: |
October 2-4, 2006 |
|
|
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BI
|
| Who: |
Barcoding
Inc.
|
| What: |
The Future of Barcoding and RFID Conference
and Exhibition
|
| Where: |
Schaumburg, Illinois, USA |
| When: |
October 12, 2006 |
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|
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IABE
|
| Who: |
International
Academy of Business and Economics (IABE)
|
| What: |
IABE-2006 Annual Conference
|
| Where: |
Las Vegas, Nevada, USA |
| When: |
October
15-18, 2006 |
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|
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BSC
|
| Who: |
Balanced
Scorecard Collaborative
|
| What: |
2006 BSC North American Summit
|
| Where: |
Hotel Del, San Diego, CA |
| When: |
November
7-9, 2006 |
|
|
|
Organising
Committee
|
| Who: |
Organising
Committee
|
| What: |
E-Learning Symposium
|
| Where: |
RMIT
University, Melbourne, Australia |
| When: |
December 3-5, 2006 |
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CALLS FOR PAPERS
ASBE
|
| Who: |
Association
for Small Business & Entrepreneurship
|
| What: |
2006
Association for Small Business & Entrepreneurship
Conference
|
| Where: |
Corpus
Christi, Texas, USA |
| When: |
November
1-3, 2006 |
Submission
Deadline:
September 15, 2006
|
|
|
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ISBD
|
| Who: |
International
Society of Business Disciplines
|
| What: |
Semi-annual Professional Meeting
|
| Where: |
Las
Vegas, Nevada |
| When: |
November
5-8, 2006 |
Submission
Deadline:
September 21, 2006
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|
|
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SWDSI
|
| Who: |
Southwest
Decision Sciences Institute
|
| What: |
SWDSI Conference
|
| Where: |
Town and Country Resort - San Diego,
California, USA |
| When: |
March
13th-17th, 2007 |
Submission
Deadline:
September 29, 2006
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|
|
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WDSI
|
| Who: |
Western
Decision Sciences Institute
|
| What: |
2007 WDSI Annual Meeting
|
| Where: |
The Inverness Hotel and Conference Center
in Englewood, Colorado |
| When: |
April 3-7, 2007 |
Submission
Deadline:
October 1, 2006
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|
|
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SFSU
|
| Who: |
San Fransisco
State University
|
| What: |
2007 International Business and Economy
Conference
|
| Where: |
San Fransisco,
California, USA |
| When: |
January
4-7,
2007 |
Submission
Deadline:
October 1, 2006
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ACME
|
| Who: |
Association
of Collegiate Marketing Editors
|
| What: |
2007
Annual Meeting
|
| Where: |
San
Diego, California, USA |
| When: |
March
13-17, 2007 |
Submission
Deadline:
October 1, 2006
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|
|
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RCC
|
| Who: |
Rollins China Center, Rollins
College |
| What: |
The Globalization of Chinese Enterprises:
The Advent of a New Age
|
| Where: |
Rollins
College in Winter Park, Florida, USA |
| When: |
November 30-December 1, 2006 |
Submission
Deadline:
October 15, 2006
|
|
|
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EIRASS
|
| Who: |
European Institute of Retailing
and Services Studies |
| What: |
14th
EIRASS Conference
|
| Where: |
San
Fransisco, California, USA |
| When: |
June 19 - July 1, 2007 |
Submission
Deadline:
October 1, 2006
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TIP
OF THE WEEK
Managing
Ethics Overseas
Managing ethics overseas is especially challenging, because what
is ethical in one country may be regarded as unethical or even
illegal elsewhere. For example, when dealing with under-performing
employees who are the primary breadwinners of their families, Korean
managers are likely to view keeping them as ethical and American
managers are likely to view keeping them as unethical. Whistle
blowers in collective societies such as Japan are regarded more
as lowly traitors than high-flying heroes. In Nigeria, illegal
cross-border trade is so widespread that it becomes the norm. Microsoft's
competitive practices, having survived a multiyear trial and been
cleared by the US antitrust authorities, have been labeled illegal
in the European Union. Facing these and numerous other differences,
how can current and would-be strategists prepare themselves instead
of getting lost and burned overseas?
According to Thomas
Donaldson, a leading business ethicist, two schools of thought
deal with ethical dilemmas overseas. First,
ethical relativism refers to an extension of the cliché, "When
in Rome, do as the Romans do." If female employees in Japan
and Saudi Arabia are discriminated against, so what? Likewise,
if Belgians fail to punish insider trading, who cares? Isn't that
the way "Romans" do in "Rome?" Second, ethical
imperialism refers to the absolute belief that "There is only
one set of Ethics (with the big E), and we have it." Around
the world, Americans are especially renowned for believing that
their ethical values should be applied universally. In other words,
if sexual discrimination and insider trading are wrong in the United
States, they must be wrong everywhere else. Between the late 1970s
and the late 1990s, the United States was the only country that
banned its firms from making bribery and other "questionable
payments" to foreign government officials. In contrast until
the late 1990s, many EU countries such as Austria, France, Germany,
and Netherlands legally allowed bribes that were paid to foreign
officials to be tax deductible (!) - a clear sign of ethical relativism.
In practice, however,
neither of these schools of thought is realistic. At the extreme,
ethical relativism would have to accept any practice
that is undertaken within a different culture, whereas ethical
imperialism may cause resentment and backlash among locals. Donaldson
suggests three "middle-of-the-road" guiding principles.
First, respect for human dignity and basic rights (such as those
concerning health, safety, and the need for education instead of
working at a young age) should determine the absolute, minimal
ethical thresholds for all operations around the world.
Second, respect
for local traditions suggests cultural sensitivity.
If all gift giving is banned, then foreign firms can forget about
doing business in China and Japan. While hiring employees' children
and relatives instead of more qualified applicants is illegal according
to US equal opportunity laws, Indian companies routinely practice
such nepotism as a part of the employee benefits that help strengthen
employee loyalty. What should US companies setting up subsidiaries
in India do? Donaldson advises that such nepotism is not necessarily
wrong - at least in India.
Finally, respect
for institutional context calls for a careful
understanding of local institutions. Codes of conduct banning bribery
are not very useful accompanied by guidelines for the scale and
scope of locally appropriate gift giving. For instance, Rhone-Poulenc
Rorer, a French pharmaceutical firm, has invited foreign subsidiaries
to add locally appropriate supplements to its corporate-wide code
of conduct. Overall, these three principles, although far from
perfect, have helped managers make decisions about which they and
their firms feel relatively comfortable.
| Mike
W. Peng. Global Strategy. Thomson Southwestern.
2006. Pages 124-125 |
ANNOUNCEMENTS
Allied Academies Deadline Extension ALLIED has
a new registration form up and
working. To celebrate they would like to extend the
submission deadline, as well as the preregistration
deadline, to September 16. For submission instructions please click
here.
Excellence in Marketing Award
The Marketing
Management Association's Excellence in Marketing Award for
2006 will be presented to Mr. Jim Craner of Saturn on Friday,
September 22 at the MMA Fall Educators' Conference to be held
at the Sheraton
Nashville Downtown Hotel in Nashville, Tennessee. For more info
click
here.
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The
SBANC Newsletter is provided as a service to the members of our
affiliates: Academy of Collegiate Marketing Educators (ACME), Association
for Small Business & Entrepreneurship (ASBE), Federation of
Business Disciplines (FBD), International Council for Small Business
(ICSB), Institute for Supply Management (ISM), The International
Small Business Congress (ISBC), Marketing Management Association
(MMA), Small Business Administration (SBA), Service Corps of Retired
Executives (SCORE), Small Business Institute (SBI), Society for
Marketing Advances (SMA), United States Association for Small Business & Entrepreneurship
(USASBE), U.S. Department of Veterans Affairs (VA).. If you are
interested in membership or would like further information on one
of our affiliates, please see our web site at http://www.sbaer.uca.edu
SBANC STAFF
Main Office Phone: (501) 450-5300
Dr.
Don B. Bradley III, Executive Director of SBANC & Professor
of Marketing;
Direct Phone: (501) 450-5345
Brandon
Tabor, Development Intern
Garion
McCoy, Development Intern
Casey
Thomson, Development Intern
To subscribe or unsubscribe to the
SBANC Newsletter, please E-mail SBANC at sbanc@uca.edu
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