FTC Rule to Impact ETRM Industry
The Federal Trade Commission (FTC) introduced a rule yesterday banning all use of noncompetes in employment agreements (for everyone except execs). It will likely see opposition in court this week, but I’d like to think we can all agree the use of these clauses to intimidate employees must come to an end. Many seem to agree. The FTC opened this topic for public comment prior to issuing the rule. In 90 days, they received 26,000 comments. 25,000 of those were in support of banning noncompetes.
Noncompetes are common in the ETRM space, and so, too, are the stories supporting why this practice should be eliminated from the corporate playbook. Most don’t know this, but in the early 2010s, a noncompete put me in the difficult situation of choosing between providing for my family or being physically with my family. This was the hardest time of my adult life and marriage.
Thankfully, courageous people stood up for me and put their own necks on the line to open a door of escape. That was a turning point moment in my life both personally and professionally, and I am forever grateful. I now want to do anything I can to advocate for and participate in these clauses being abolished. A handful of states like Oklahoma and others now have laws voiding noncompete clauses in existing employment agreements, but this move should occur (and is) at the federal level.
My successful transition to another employer was not the end of my noncompete experience. I have since seen threats handed out to many individuals and even Triarc has been the recipient of multiple corp-to-corp threats during my time in leadership. My responses are always the same...
To employees:
Work where you work because you agree with the vision, like the people, and are paid well - not because you aren’t allowed to leave. No organization is perfect. So do your part to water the grass wherever you’re standing, and it will be greener.
To employers:
Own the responsibility of making your organization a place where people want to be. An unhappy employee will not contribute to your team or meet your customers’ needs. Make employees happy or allow them to go elsewhere, celebrating their contribution during the transition.
While we continue to watch the legal debate play out for existing employment agreements, all of us have an opportunity to impact change. I encourage employees to stop accepting this language in new agreements. I encourage employers to remove these from both new and existing agreements. I encourage customers of businesses who use these agreements to speak to your providers about them. According to the FTC, “[t]here is also evidence that noncompetes lead to increased market concentration and higher prices for consumers.”
Left untouched, noncompetes negatively affect everyone: employee, employer, and consumer. But today, we are all in a strong position to make an impact.
