Noncompetes Under Scrutiny
Last month we discussed the FTC’s proposed rule to ban noncompete agreements. So we were curious to hear what you thought about noncompetes. We had a solid turnout of 15,694 votes this month!
Employees really hate noncompetes! 54% of votes were from employees who hate them and 19% were from employees who’ve never signed one. Only 4% were employees who don’t use them.
Employers generally like noncompetes. 13% of votes were from employers who use noncompetes to protect their business. 4% of employers were frustrated that noncompetes have kept them from hiring good candidates. The remaining 3% were employers who didn’t use noncompetes.
Here are the full results:
What do you think of noncompetes?
- As an employee, I hate them – they limit my options (54%, 8,475 Votes)
- As an employee, I don’t mind them (19%, 2,982 Votes)
- As an employee, I’ve haven’t signed one (13%, 2,040 Votes)
- As an employer, I need them to protect my business (7%, 1,099 Votes)
- As an employer, they’ve kept me from hiring good candidates (4%, 628 Votes)
- As an employer, I don’t use them (3%, 471 Votes)
Total Voters: 15,694 (February 1, 2023 @ 6:42 pm – March 1, 2023 @ 4:23 pm)
Some comments from y’all:
- “There are situations in the business world where a non-compete is important, keeping someone from changing low paying jobs is not one of them.”
- “I think this is very much a two-sided argument. As someone who is an employee but is sitting in a management position, I can see both sides. Noncompetes do prevent employees from moving to the competition. But from the employer standpoint, their purpose is to prevent talent from taking their knowledge of company operations directly to the competition. Both sales and service reps have a working relationship with their customers, which they can easily take to their new competitive employer. We’ve seen it happen here several times. We had one sales rep go to a competitor selling the same product and visit their same customers, acting as if they still worked for us. One specific customer called us for support on their NEW machine that we had no record of selling them.”
- “In my opinion, an employer in the United States does not have the right to force an employee to stay at their company when the employee feels that he/she would get better wages, benefits and working conditions elsewhere – even in the same market. Fortunately for technicians, we occasionally run into techs from other companies. We talk. Employers claim competitive wages – we know how ‘competitive’ they really are. There are actually some employers who treat their employees very well, as they should. Working conditions also go a long way to retaining talent.”
- “I can see non-competes in a R&D setting but in the copier industry it seems kind of lame. From a copier tech point of view it just seems to be a way for the company to keep you stagnated. If they want to keep that top-end talent it’s simple: Pay them.”
- “Hire great employees and empower them. Give them a comp plan that rewards both employee and the employer well. Then the employee won’t even think about finding somewhere else to work. This is much more effective than resorting to noncompetes to keep a top-performing employee from seeking a job from another company.”
- “Noncompetes for technicians are basically trying to bring back feudalism. Serfs don’t have the right to switch employers so they just have to accept the conditions they’re given.”
- “Noncompetes are just the employer’s way of keeping the employee from thriving financially. A company isn’t going to sign anything that’s bad for them and will limit their livelihood, so why should an employee sign something that’s bad for them? An employee is making money to support themselves and support their family. I don’t sign them, and won’t sign them unless the employer signs a document guaranteeing me regular raises – and we all know how that would go.”
- “Non-solicitation agreements are one thing, but I feel noncompetes are antithetical to a competitive free market economy.”
- “They take all the rights of the worker away!”
- “They are bullsh*t and nearly impossible to enforce.”
- “Noncompetes are stupid. My company was bought by another company and we had to sign a non compete. What other choice did we have at the time. But I will not let it prevent me from looking for another job if I choose.”
- “I don’t care what they have me sign, it’s not going to stop me from applying to whatever job I want to.”
- “I applaud the FTC for fighting this. Barriers to markets are created by the markets themselves in order to limit competition, increase revenue, and profit. Without noncompetes, we will have more small businesses challenging the big businesses to honor their commitments or lose share. Laws are often made to protect the big and keep the small down, and we need to keep trying to do something about that.”
- “If you choose to have me sign that paper the job offer needs to sky rocket. Giving any employer the illusion of that much control over my life is not cheap.”
- “As a technician I have never been asked to sign one, but may have had second thoughts about accepting an offer if such a thing had been asked. Protecting trade secrets is only fair, but not allowing someone to earn a living with the skills they have developed over the years isn’t right. If a company wants to minimize employee turnover, they just need to treat them right. However, I appreciate that isn’t always an easy thing to recognize or implement from where executives sit. Most companies and managers believe they already do it well.”
- “It is my opinion that noncompetes can create a hostile relationship between employee and employer, even if the employer doesn’t realize it. It’s a job, not a marriage. If you pay a decent wage and otherwise take care of your employee, ROI (including loyalty) will not be an issue. But go ahead – keep paying these old-school wages that are 20 years outdated. Go ahead and require a noncompete if you think that will help with the talent shortage (that is painfully obvious to those of us who have been around for a while). See what happens.”
- “We have noncompetes, but they have proven unenforceable for techs. The courts have said that you cannot be denied a right to make a living.”
- “A noncompete for a tradesman or technical professional is utterly inane. Trying to prevent someone with a skill they’ve honed for decades from leaving for better pay, conditions or benefits? Seriously?!
- “In Missouri, it’s more like a non-solicitation agreement. When a rep leaves the company, they cannot call on our existing accounts. Like any business transaction, both parties agree to stipulations (up front) that provide the needed, mutual value. I believe any such ‘condition’ should be limited to two years.”
- “NCAs allow companies to give minimum raises to their current employees. The way it works is the technicians that have been with the company many years and feel trapped make a lot less than new employees with no experience. Without NCAs, companies will have to pay their tenured employees more or lose them.”
- “If a company has you sign one, they are afraid you will leave and take clients with you. If you are a good company and take care of your people, they are not likely to leave. The good sales person and their clients will always be connected to each other. The company doesn’t matter – it’s who takes care of the client. The relationship between sales person and client is a deep trust. As a sales person if you gain that trust with the client, they will follow whatever you go. The client is looking for a fair deal and someone who will make the process as easy for them as possible. The client wants the path of least resistance. Make that happen for your client and they will follow no matter what noncompete there is. The client always will have the right to buy from who they want. Nothing any company does will change that.”
- “Just an attempt to keep low wages low by limiting options.”
- “Noncompetes are nearly worthless in ‘right to work states.’ That said, a person of good morals will refrain from harvesting accounts for at least 6 months or 1 year if he/she was already paid to do so for another company. Just remember that the employer likely can spend a former employee into bankruptcy just in legal fees, only to mutually drop the suit. So it’s not worth risking.
“The only way I would argue in the other direction for this is if the account is neglected to the point where the customer tracks down the former rep/tech and asks for help. Maybe because there is no longer a rep from that company in that state/city. Then maybe you can work out a buy-out of the account or ask them to let you take it over. If they refuse, they will end up with many bad reviews.”
- “I don’t think these noncompetes are legal. If our main source of income is being a copier technician, how can someone tell you can’t work somewhere else?”