#8 - Some companies in fields where skilled employees are

[Administrator]

Complete Question Explanation

Resolve the Paradox. The correct answer choice is (A)

The paradox presented here is as follows: in spite of the fact that more and more courts are dismissing non-compete clauses as non-binding, companies still often respect the wait time required by such clauses. The correct answer choice will explain some incentive that companies have to respect the non-compete clauses of other companies.

Correct answer choice (A) resolves the paradox by presenting a reason for companies to avoid hiring a new employee during the referenced waiting period: there is risk associated, even in cases where the company can be confident of emerging victorious. If the company is concerned about the costs and the bad publicity regardless, then it doesn’t matter if they perceive a good chance of winning the case. Incorrect answer choices (B) and (E) expand the paradox, and (C) is irrelevant since we’re talking about the new hiring companies’ willingness to hire—not the companies that employees left. Incorrect answer choice (D) is irrelevant because the stimulus deals with the companies’ unwillingness to consider applicants during waiting periods, not with the employees’ willingness or unwillingness to join a competing firm.

[StanleyMK]

Hello PowerScore Staff,

For this Resolve question, I narrowed down the answer choices to A and E.

I ultimately chose E, and I think I understand why I was wrong to choose it. However, I would love to get verification from an expert.

Here was my (flawed) reasoning:

When I chose E, I think I may have made an unwarranted assumption. E says, "Many companies consider their employees' established relationships with clients and other people outside the company to be valuable company assets." My assumption in choosing this answer was that, if companies were to hire a person who is still under their "agreement not to compete" with another company, they'd lose that person's valuable established relationships by annoying the company from which that person is under the agreement with. In annoying the person's previous company, they lose that person's established relationships with that other company (which provides incentive for being unwilling to consider hiring anyone under such an agreement even though the agreement is often not legally binding). In other words, it resolves the paradox.

Am I correct in saying that I made an unwarranted assumption in choosing E? Because if I haven't, I don't see how E is incorrect.

As always, thank you for your wisdom and insight!

[James Finch]

Hi Stanley,

It sounds like you're assuming that the language in (E) is a trick, and thus interpreting it to mean the opposite of what it's saying at face value. (E) would exacerbate the paradox by making it more desirable to have the person with "valuable company assets" working for them as soon as possible; after all, those assets are only valuable when in use by the company, not sitting idle, waiting out a non-compete period.

(A) on the other hand clearly gives a reason for the company to avoid having someone work for them during a non-compete period, even if those clauses aren't going to hold up in court. Having to go to a court alone incurs costs and potential PR problems, so they might not want to rock the boat and will just wait the until the non-compete is over.

Hope this clears things up!

[andriana.caban]

Hi,

It looks like I over analyzed the answer choices despite picking the correct answer. Originally, I had eliminated (a) for the below reasons:

The answer choice states “many companies...publicity”. But, there is a problem. The stimulus goes from discussing “some companies” and the by the end shifts and discusses “many firms”. I thought this didn't follow the logic of the author. Upon reviewing (b) (d) and (e), I came back to (a) because the other answer choices were so beyond incorrect to me. I did stop and consider (d) but eliminated it because it discusses "unwillingness" of "many people" when the discrepancy is unwillingness of companies.

Was I too forward in my analysis?

[Robert Carroll]

Andriana,

There is very little difference between "some" and "many", as "some" means "at least one" and many means "at least two". In most situations, the terms are used interchangeably, and this stimulus does not appear to be an exception. Thus, I don't see a difference there. Now, the "some" and "many" apply to possibly different categories of companies, but that doesn't really seem to be an issue here either. I think ultimately you just overthought this one.

Robert Carroll