Restricting competition.

Byline: The Register-Guard

Corporate radio giant Cumulus Media, which owns as many Eugene-Springfield radio stations (six) as the law will allow, didn't get to be the second-largest radio chain in the nation by shying away from competi- tion.

Yet Cumulus is dead set against competition in one crucial area: It prevents its former employees from working for rival Lane County radio stations.

Cumulus uses noncompetition clauses in its employment agreements to keep its employees - particularly on-air talent and sales staff - from being hired away by competitors. Oregon law allows any employer to enter into a noncompete agreement with key employees or those employees with access to sensitive or propriety information. The agreements usually limit the work ban to a specified time period and geographic area, both of which must be "reasonable" for the noncompete clause to be valid.

Noncompete agreements are unlikely to go down in history as one of the finer contributions of corporate lawyers to the evolution of the free market. They're illegal in some states and rigidly restricted in others. In California, a noncompete agreement is enforceable only if someone sells a business and agrees not to compete with the new owner.

Because noncompete clauses cut so clearly against the grain of unrestricted opportunity for American workers to earn a living, they are often challenged in court. That's happening in the Eugene-Springfield radio market, as the two-station startup Churchill Communications is suing to nullify 

Cumulus Media's noncompete agreements with two former Cumulus employees.

A judge will decide the merits of Churchill's claim, but there is a larger issue of the impact of noncompete agreements in industries, such as radio, where consolidation and mergers have steadily reduced competition.

Locally, Cumulus owns KUGN-AM, KZEL-FM, KEHK-FM, KNRQ-FM, KUJZ-FM AND KSCR-AM. The Atlanta-based corporation entered the Eugene-Springfield market in 1999, and in 2001 reached the Federal Communications Commission ownership limit of six radio stations for a market this size. Nationally, Cumulus owns 305 stations in 61 midsized markets.

A Cumulus noncompete agreement in the Eugene-Springfield market, by design, prevents former Cumulus employees from accepting another radio job in Lane County for the duration of the agreement. An employee's only alternatives are to move to another market or change professions.

Cumulus says noncompetes are necessary to protect the company's training and promotional investment in its employees, and to prevent competitors from learning trade secrets.

But if that's vital to the success of radio enterprises, it fails to explain Cumulus Media's aggressive acquisition of California radio stations, where noncompete agreements aren't allowed.

The professions that thrive without resorting to noncompete agreements far outnumber the ones that do.

Such an onerous and arbitrary restriction on the ability of certain employees to pursue a livelihood is hard to square with an Oregon workplace tradition of freedom to work wherever one has the requisite skills and qualifications.

Competition is the cornerstone of the free market. As American historian Gil Atkinson said, "Thank God for competition. When our competitors upset our plans or outdo our designs, they open infinite possibilities of our own work to us."