This week the FTC issued a rule this week that bans non-compete clauses, estimating that up to 8,500 new startups will be created as a result of the ban. The federal agency describes the downsides of non-competes this way:
“Noncompetes are a widespread and often exploitative practice imposing contractual conditions that prevent workers from taking a new job or starting a new business. Noncompetes often force workers to either stay in a job they want to leave or bear other significant harms and costs, such as being forced to switch to a lower-paying field, being forced to relocate, being forced to leave the workforce altogether, or being forced to defend against expensive litigation.”
Critics of the ban describe it as unnecessary government intervention. Regardless of who is more in the right, there is a bigger and more obvious implication here. The best way to make this issue irrelevant is to focus on employee retention. Give them more ownership over their work. Don’t steal their ideas or shut down their ingenuity. In other words, make the issue of non-competes irrelevant … which it would be if your best people never leave.
