The FTC Ruling on Banning Noncompete Clauses
The Federal Trade Commission’s (FTC) impact on banning noncompete clauses created a buzz in the news recently, spawning many concerns and comments from business owners and employees.
Reactions to the noncompete buzz
Some welcome this change and say it will open up the labor pool and allow employees to move around from one job to another without restrictions. However, others, specifically business owners, fear this may lead to losing company secrets to their competition, perhaps from their current employees taking clients with them. Or they feel their top employees could start their own companies in their local market. How do you feel?
In a recent interview with Scott Tackett, a business development advisor with Violand Management Associates, and a noted human resources expert, he said this issue might take some time to develop. Still, savvy business owners should take notice and consider what they can do in anticipation of this ruling taking effect.
How to protect your business
Tackett shared three essential courses of action for business owners:
- Every business owner should review their current noncompete agreements to ensure they comply with current local, state, and/or federal laws. If concerns arise, seek legal counsel.
- It’s crucial to ensure the use of properly structured confidentiality and nondisclosure agreements (NDAs). While noncompete clauses might be banned, companies can still enforce confidentiality and NDAs. They must update and maintain these agreements.
- Business owners need to focus on company culture. If we do an excellent job with our culture, we minimize the fear of losing top employees. Engagement and retention should be the focus, not just in this situation.
Is there cause for fear? For most, probably not. However, a well-trained and savvy employee with a solid entrepreneurial spirit can’t easily be restrained from forging ahead and starting their own company. Get ahead of this issue by following Tackett’s advice. You can watch this episode of Take 5 with Cleanfax at cleanfax.com/ftc.
Watch the full interview below:
Jeff Cross
Jeff Cross is the ISSA media director, with publications that include Cleaning & Maintenance Management, ISSA Today, and Cleanfax magazines. He is the previous owner of a successful cleaning and restoration firm. He also works as a trainer and consultant for business owners, managers, and front-line technicians. He can be reached at [email protected].
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