April 24, 2024

Non-competes ended. But how did they start?


Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

A brief, idiotic history followed by a rant. The usual.

In case you live under a rock (or just have a life), the FTC ended non-compete agreements yesterday. But did you know how non-compete agreements started?

They were invented in medieval times. No, not the kitschy fake-knights-on-horseback dinner theater.

Once upon a time (phrasing feels appropriate here), when people were dumb enough to follow kings and queens (tag a British friend who will get mad), master tradesmen used non-competes to ensure their apprentices (who they spent years training) didn’t turn around and put them out of business. They instead had to wait for the Black Plague to kill their boss. Or Jack Sparrow to come to town and offer an alternative career path (crime.)

A thousand years and the invention of modern medicine later, the “we trained you!” justification for non-competes is still used. Because they put you through a 1 day onboarding and a couple Zoom webinars. I’m not just talking Office Dorks™️ like y’all. Think sandwich makers at the local Jimmy Johns. Trade secrets in those cold cuts, you guys.

Whelp, the FTC put the ban hammer down. Non-competes are illegal. Now we can look forward to years of litigation from the Chamber of Commerce (every fairy tale needs a villain) because competition is…bad?

One thing to remember: non-competes were always a joke. In my 20 years working in recruiting in Chicago, I saw a non-compete upheld exactly once. Kind of. The firm the guy left had to pay him to not work for a year.

In reality, no judge wants to uphold them. It’s litigious harassment. Companies pay for lawyers to file suits against people who can’t afford to fight them. The types of dum dum companies whose only means of retaining employees is “you’ll never work in this town again!” fear-mongering.

Here’s an idea: if someone wants to leave, let them.

You’ll be amazed what allowing unhappy people (justified or not) move on will do for morale and productivity.

Another idea: make the vibes not suck. People will stay because they want to! (Crazy talk, I know.)

Remember that NDAs still protect trade secrets. Non-solicitations protect client relationships. And California got rid of non-competes years ago and they still have the biggest state economy in the US. It’s fine.

Sarcasm aside, the ban will have a positive effect on well-run companies. Those orgs will grow as they pick off talent from their miserable-to-work-for competitors.

Free markets work great…when they apply to everyone.

Partner at Hirewell. #3 Ranked Sarcastic Commenter on LinkedIn.

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