Mad Men Non-Competes
The much acclaimed Mad Men AMC television series is coming to an end with only a few episodes left. The partners and employees of the New York advertising firm Sterling Cooper have given us a number of employment, partnership, negotiating, and other lessons over the years. Times have changed with the firm as we have followed its evolution from 1960 to the early 1970s. The final and seventh season finds Sterling Cooper operating as a subsidiary of McCann Erickson, an advertising behemonth. Previous to this the Sterling Cooper partners sold their interests to McCann and they are now all millionaires. For the past few episdoes the Sterling Cooper folks have been operating with relative autonomy with offices in New York and Los Angeles.
So, it comes as a shock to Roger Sterling when he finds out that McCann has cancelled Sterling Cooper’s New York office lease and McCann will essentially absorb Sterling Cooper. The partners have a few closed door meetings where it is revealed by Joan (the sole female partner) that they are all subject to a non-compete agreement, which was part of the terms of their buyout. Of course buyout non-competes are relatively common. An acquirer of a new company does not want to compete with the folks it is acquiring after the deal closes. Courts are generally more apt to enforce these types of agreements though in Texas, they still must satisfy the non-compete statute. Regardless, the partners do not question the enforceability of the non-compete. They assume it is enforceable and place no calls to counsel for guidance. (That would probably take too long in the space of a 60 minute episode.)
Leave it to Don Draper to come up with a plan. The Sterling Cooper partners will move to Los Angeles and operate and continue to operate a subsidiary of McCann. They will continue to work for clients that McCann cannot represent and everyone will be happy. The partners then go into overdrive as they attempt to secure the move of those clients and Don prepares to make the most imporant presentation of his life to McCann.
The next day the partners head over to McCann where their proposal is met dead on arrival. McCann concedes the Sterling Cooper partners have won and awards them several high profile accounts to handle. Don gets Coca-Cola. Of course, Joann gets nothing. Now we can spend the next few episodes seeing how the contour of this new relationship works. We’ll see how the sexist McCann employees deal with Joann.
The Sterling Cooper partners give us a solid takeaway for non-compete disptues. In many instances the non-compete an employee faces is enforceable. But, that fact does not foreclose the possibility to negotiate or reach some agreement with the former employer. A non-litigation solution in most instances is preferable to a lawsuit where the outcome is uncertain.