Hiring is tough, but don't waive restrictive covenants

Hiring. It's easily the most significant challenge facing almost every company as we try to move away from the COVID-19 pandemic economy. Businesses are having difficulty recruiting and keeping talent in almost every profession, field, and position. Now is not the time, however, to waive your key employment covenants.

How we got here

To increase their visibility and improve the odds of landing top-tier candidates, many businesses have started offering generous incentives to new hires. Full relocation packages, housing, extra vacation, and garish signing bonuses are now normal. Legally speaking, those kinds of incentive packages are generally fine, although every business should have a qualified employment and compensation attorney review the fine print to avoid any unintended consequences.

Through the grapevine, I've heard other companies have been more aggressive in the recruiting process by agreeing to waive key employment covenants like noncompetes and nonsolicitation agreements. The practice (similar to new homebuyers waiving all inspections) makes my head hurt a little.

Only one shot for employers

Businesses generally get only one shot at creating an enforceable employment covenant, and it's at the time of hire. New Hampshire law, for example, requires noncompetes for new hires to be disclosed "prior to the employee's acceptance of an offer of employment." In other words, you can't temporarily "suspend" noncompetes during a strained labor market and then reintroduce them later.