Does the absence of non-competes pave the way for dismissed employees to now march your trade secrets out the door, only to be delivered to your competitors on a silver platter? It doesn’t have to! Keep reading for how to prevent it.
Last month we updated you on the FTC’s nationwide Non-Compete Ban, which came to pass for a number of reasons that make this move an overall benefit to us in the business world, but a number of concerns that have always plagued business owners may now need some attention.
With employers now enjoined from enacting any further non-compete agreements, and those already in existence effectively nullified (with a few exceptions), here are a few things to consider…
Of course, there’s the possibility of one of your people growing disgruntled, appropriately or not, and departing with a chip on their shoulder, putting whatever confidential company information they’re harboring in jeopardy.
On the other ed of the spectrum there’s the scenario of a new hire playing out a farce to set you up for some frivolous lawsuit; anything from a discrimination claim to overtime pay demands for remote work, and beyond.
In light of these contingencies, bear in mind that the old non-compete agreement was never a true hedge against them. This development perhaps just highlights an overdue need to tighten your hiring standards and practices, and hone your instincts.
Consider these tweaks to HR process:
- Look for the red flags in the screening process, and nip it in the bud. Restructure it in a way that’ll bring them out. Then… Don’t hire them. Run, don’t walk from candidates that display a certain aloofness for the job and the company, unwillingness to assimilate, or any signs that could lead to the extreme cases listed above, or anything in between.
- Take them on, but don’t make them your employee. Structure a legitimate consulting arrangement, or some other working status that allows them to bring value to your organization without deeming them a full employee at the outset. Let the relationship possibly grow into that. You can’t be sued under employee claims by a non-employee!
The days of getting them to sign on the dotted line and then forgetting about these dangers are gone, and good riddance, as this was never an advisable way to handle these matters. But if you keep your standards high and your eyes open in your course of business, the demise of the non-compete can work for your enterprise, not against it.
Questions or concerns about how to make this happen? Send us a message and we’ll address any issues you have! And if you haven’t already, don’t forget to sign up for our newsletter to receive regular updates like this!
Contact Jonathan Scott and Commerce Law Partners – Prepare to Win!
