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When Mary Joins Wayne Enterprises, She Is Made to Sign

Question 66

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When Mary joins Wayne Enterprises, she is made to sign an agreement including the "non-compete clause" (an agreement where the employee promises not to work for a competing firm for a set period after leaving his or her current employer) , as a condition of her employment. Though courts nowadays are increasingly ruling that these agreements are not binding, most competitor firms are unwilling to consider hiring Mary during the period covered by the agreement. Which of the following, if true, explains this situation?


A) Most people who have signed such agreements are willing to renege on a promise by going to work for a competing firm.
B) The 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) Most companies will not risk getting involved in lawsuits, even suits that they expect to have a favorable outcome.
E) Most companies consider their employees' established relationships with clients and other people outside the company to be valuable company assets.

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