By MARK RIFFEY for the Flathead Beacon Newspaper
Have you ever signed a non-compete, non-disclosure clause as a condition of employment? Do you make your employees and / or contractors sign one?
I’ve used/signed a few over the years. Companies can’t risk serious insider knowledge of their business by having employees pass it to their competition. Non-competes provide a mechanism to protect yourself but their scope should make sense. Historically, judges aren’t inclined to prevent people from earning a living, as long as they haven’t stolen their former employers’ intellectual or competitive assets.
Non-compete, non-disclosures make sense
General Motors wouldn’t want a senior executive to jump to Ford after absorbing a substantial amount of internal GM intelligence. Asking that exec to sign a non-compete, non-disclosure with reasonable scope makes sense.
However, there’s a new class of non-compete clause users: companies in low wage service industries. We’re talking about clauses that limit job mobility for people who make sandwiches, deliver food and bus tables. These broad non-competition clauses prevent entry-level employees from working for another business within a distance of two miles.
These clauses are gaining scrutiny because of the conditions they create for the employee. Rather than risk the perception of being sued or being unable to change jobs, they may stay in an unpleasant job for fear of repercussions. Not all employees will care about this, but some will.
Sunshine solves a lot of problems
Missoula Sunrise. Photo ©Mark Mesenko. www.mesenko.com
While I doubt you’ve ever worried about not being able to hire a new employee because they might have worked at a certain franchise sandwich shop in the last two years, it’s bigger than that. They’re limiting your potential employee pool.
What if your next amazing employee didn’t fit in at that shop but fears that working in your pizza joint might land them in court? From the employee’s perspective, there are a number of unpleasant scenarios that a fear-mongering boss could wield over those who signed one of these broad non-competes. These concerns could keep someone in an unpleasant, dangerous, illegal or unfavorable position – or they may leave the restaurant business forever, even if they love it.
The answer is sunshine.
When you come into a room and turn on the lights, cockroaches head for crevices. When you pull a tarp off of a pile of lumber in the spring, the critters hiding inside scatter for cover.
Likewise, you need sunshine marketing to shine a light on situations like this.
“Worried about your non-compete? We gladly hire former employees of X-Y-Z. We’ve got your back.”
“Our employees have the freedom to come or go as their needs change. We hope they’ll stay and grow with us, but if they move on, we aren’t going to chase them with lawyers.”
“Our team is happy to serve you because we pay a good wage and provide a fun place to work. The secret to our success is our focus on providing great food (or whatever), great people and great service, not shackling our team to a non-compete agreement.”
You get the idea.
Sunshine marketing to the rescue
Why would I suggest provoking a local franchise owner and their corporate parent? Because they’ve already declared war against your business. As a condition of employment, applicants (regardless of job role) must sign a non-compete agreement preventing them from working at any business within two miles if 10% or more of the business’ revenue comes from sandwiches – including yours.
In other words, everyone they hire must sign paperwork saying they can’t work for you. Are you going to take that?
What will happen if you hire one of their former employees? Most likely, nothing. Do franchise owners have nothing better to do than visit competitors to check for the presence of former employees? If their former employee works for you, will they file suit? Can they afford the cost of dragging you into court for something this frivolous?
If so, let them.
The court of public opinion will crucify them and it will be your responsibility to hand the cross and nails to the local and national media. Even if the corporate parent supplies the franchise with free legal support (doubtful), you’ll have the kind of PR that dreams are made of: a corporate parent threatening your locally-owned business with legal action because you hired a (probably) minimum wage employee trying to support their family or pay their way through college.
Are you going to let that slide?
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Want to learn more about Mark or ask him to write about a strategic, operations or marketing problem? Mark Riffey’s website: They Said It, contact him on Twitter, or email him at mriffey@flatheadbeacon.com.