Frivolous Contracts with Employees

255 Ineffectual Contracts with Employees

When hiring, an employer often requires that the new hire sign a contract to the effect that if there comes a time when they part ways, whether the employee resigns or is fired, the employee will not use the knowledge gained while working there to open up shop elsewhere—or within a certain radius of that location. The contract of an outreach worker might state that in the event the contract is terminated, they may not continue to reside in that city. Most of these contracts have no validity according to halachah, and are therefore meaningless. They are examples of a kinyan devarim, a commitment made by a person that they will act a certain way or refrain from a particular activity. It can only be effective if there is a knas, a specific penalty agreed to, and under certain conditions; even then there could be an issue of asmachta—the signatory had not believed at the time that this situation would ever come to pass, and therefore did not wholeheartedly agree to that penalty—a necessary condition for the penalty to have validity. There are ways to override this rule (by writing in the contract that a kinyan sudar was made in a beis din chashuv, and actually performing a kinyan sudar), and if such a case arises, one should consult a rav who is knowledgeable in these halachos. 255?1

https://halacha2go.com?number=255

Practical Halacha: One minute a day. By Horav Yosef Yeshaya Braun, shlita, Mara D'asra and member of the Badatz of Crown Heights.