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An Internship Surprise: How to Deal With Noncompete Agreements

An Internship Surprise: How to Deal With Noncompete Agreements
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For many young people trying to accelerate the transition from campus to cubicle, or for older workers seeking to re-enter the paid workforce, internships have been valuable tools to expose inexperienced workers to new industries, expand their networks, and connect with potential mentors – all critical building blocks of a successful career.

Internships also help employers create a talent pipeline into their organizations. However, interns are more frequently being asked to sign noncompete, nondisclosure, and forced arbitration agreements, based on recent reporting by The Wall Street Journal. (WSJ subscribers can see the story here.)

Further complicating the situation, interns may be presented with a noncompete agreement as part of the mountain of paperwork new employees are often asked to sign during their orientation or onboarding process. This is not exactly informed consent, and former interns may not be aware of the existence of such an agreement until they receive a letter from a former employer inquiring about their employment status and reminding them about the noncompete agreement they signed. These letters are often received years later and frequently in conjunction with their graduation from college or graduate school. 

[RELATED: MOAA's Transition and Career Center]

Noncompete agreements typically restrict a former employee from working for a competitor in the same geographic area and/or in the same industry for a specific period of time. About 1 in 5 workers in the labor force are covered by these restrictions on future employment. 

What’s a prospective intern to do in light of this development? First, inquiring about the existence of a noncompete agreement during the interview process is a very reasonable strategy. Employers look for interviewees to ask thoughtful questions about the organization and the industry as part of the interview banter. And, while it would not be wise to lead with this question, it’s a very reasonable question to ask during the later stages of the interview or during the salary negotiation process. 

Second, don’t let yourself be rushed when signing new employee paperwork. Expect to be required to protect client lists, intellectual property and other confidential business information, but carefully consider whether a noncompete agreement could adversely affect your future career opportunities. And don’t hesitate to consult with an attorney if you are unsure how a noncompete, nondisclosure, or forced arbitration agreement could adversely affect your future employment possibilities. 

Finally, always remember the first rule of career transition: If you don’t ask, you don’t get. 

For more ideas to accelerate your career progression, plan to attend MOAA’s fall networking and hiring event at the National Air and Space Museum on the national mall in Washington, D.C. the evening of Sept. 19. Advance registration is required; sign up and get more details here.

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