Whatever happened to non-compete clauses in contracts?

[Holly_Hobby]

Let them leave AIG if they want, but they can't go to work for a competitor for 5 years. There would be no need for incentive bonuses.

Non-compete clauses work, a relative of mine tested it in court and lost big-time.

I wonder what the reason is for not including a non-compete clause in contracts.

[AngryAmish]

1. Non-compete clauses are disfavored in the law

You have to show harm to a company if you work for a competitor.

The market here is in credit-default swaps on mortgage based securities. I don't think anyone is in that business anymore.

When AIG is wound up, then AIG can't complain when it's ex-employees go to a competitor.

Also, you can't add clauses to a contract retroactively.

[Milo_Bloom]

2. Because many employees wouldn't sign the contracts.

A company I work with asked me to sign a non-compete and I just laughed at them.

The reality is that the people you want to sign a non-compete are often the people you NEED, so they have more power in the negotiation.