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The Future of Non Competes

 

Currently, four states have non-compete restrictions: California, Minnesota, North Dakota, and Oklahoma. As more legislation heats up, the battle to keep non-compete agreements valid and legal continues. The Federal Trade Commission has proposed a regulation this past January banning all non-compete agreements. People who back the regulation argue that non-compete agreements unfairly hurt lower level workers and prevents them from changing jobs to earn more money or improve themselves. 

These are not high-level corporate leaders who have ownership or stock in a company and access to high-level corporate trade secrets. It has become much more commonplace in the last ten years to see mid-level workers who are required to sign non-compete agreements. Often, these workers do not have access or means to hire an attorney to review the agreement in order to protect themselves.

In recent years, as a civil engineering and architecture recruiter, I have witnessed an increase in the use of these agreements for mid-level engineers. Most of these people were not in a place to negatively impact the company they work for if they left and went to work for a competitor. Yet, they were being asked to sign these agreements and often, they were for lengthy periods of one to two years. There was no clause in the agreement to give severance or 'in-kind' consideration should the company fire them or lay them off: they were very one sided agreements. You leave, you can't work anywhere else for a year.

Yet, I do believe there is a place for these agreements. Anyone who has ownership in a company or who has an executive leadership role and a financial stake in the firm should be required to sign something. This would inhibit their ability to do financial harm to the organization should they leave and go to work for a competitor.

These issues always swing like a pendulum and rarely stay in equilibrium. Currently, the pendulum is swinging to the employee's side but businesses are not going down without a fierce fight spending millions of dollars in opposition. In New York alone, an affiliate of the Business Council of New York is spending at least $1 Million dollars in an ad campaign to stop the legislation from moving forward. Lobbying groups for the A&E industry, as well as industry execs are against this legislation as they feel it provides protection should a key person leave the firm.

What are your thoughts? Do you think there is a place for these agreements in the civil engineering and architecture world?

Published by Juli Smith





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