Non-Compete Agreements compared with: the Sun and the Wind
Posted Sunday, July 14th, 2013
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Published in SatNews Worldwide Magazine, June 2013, Bert Sadtler, Senior Contributor

To assist with career and leadership issues, SatMagazine asked Bert Sadtler of Boxwood Executive Search to provide his insight. Boxwood is a management, consulting recruiting firm with offices just outside of Washington DC and in Bradenton, Florida. Boxwood’s services involve job growth, maximizing the performance of critical, senior level talent and addressing the shift in the recruitment and compensation paradigm for employers.

While current economic challenges are causing many companies to right-size or down-size, employers who are recruiting critical talent have both the luxury of available qualified talent and the pressure to hire the most qualified difference-maker.

For a professional to be regarded as highly qualified and able to make an immediate impact, it would be critical for the candidate to poses strong relative industry and customer relationships. Candidates needing to first develop these relationships would be viewed as less then proven and requiring more time to ramp-up.

Now comes into the equation the philosophical contradiction and the complication factor of the employer’s non-compete agreement.

From a philosophical perspective, it reminds me of a story my grandmother told me many times about the Sun and the Wind.

The sun and the wind were comparing their strength one day and decided to hold a contest. The wind pointed out a man walking down the street and challenged the sun to see who could remove the man’s coat first.

The wind blew. The harder it blew, the tighter than man cinched his coat. After some time, the wind ran out of energy.

When the sun took its turn, it directed warm, glowing rays toward the man. In short order, he become warm and then so warm that he removed his coat.

Force did not motivate the man to remove his coat. Warmth made him want to remove it because it was no longer needed.

Philosophically, should we take another look at non-compete agreements?  Have we been taking a “gale force wind” approach (symbolizing our desire to force talent to do what we want) or a “warmth of the sun” approach (symbolizing our ability to lead talented people to do what we want)?

 Here are some thoughts about the “Wind’s impact” on Non-Compete Agreements:

·       If the most qualified talent you are seeking to hire currently possesses deep industry relationships, why would they agree to a Non-Compete Employment Agreement that would keep them away from their prior connections for a year or two should they leave their employer?

·       Employers are seeking candidates who demonstrate confidence and strength. If a prospective employee showed insecurity and weakness, they would not be well regarded. Doesn’t a Non-Compete Agreement show a version of Employer Insecurity and Weakness? Is this an example of a contradiction?

·       How much time and legal fees do employers spend on writing and revising bullet proof Non-Compete Agreements? What if the employer used the same resources toward best practices leadership instead?

·       How productive is an employee who is only remaining an employee due to having once signed a restrictive Non-Compete Agreement? This employee will be forever distracted wishing his efforts were better appreciated working for someone else.

·       How many resources is the employer devoting toward playing a defensive role though a Non-Compete Agreement that could be otherwise made available for the employer to play on offense such as business development, community relations, marketing, etc?

·       How much time does a new employer spend having their legal team review a candidate’s Non-Compete Agreement to evaluate its worthiness? What if the employer used the same resources toward best practices leadership instead?

·       Once a Non-Compete is breached and the battle lines are drawn, relationships and reputations are tested. The employee’s credibility can be compromised as well as both the ex-employer and the new employer.

·       How much overall loss in productivity occurs during a full-blown dispute over a Non-Compete Agreement?

·       Regardless of the duration, all Non-Compete Agreements have an expiration date. Once it has passed, how well does the ex-employee regard their previous employer? Usually, not well at all. What if the employer used resources toward best practices leadership instead of the Non-Compete Agreement in the first place?

·       Can the total value of a damaged / destroyed business relationship be fully measured?

Business needs to be direct and sometimes hard-edged. We are not suggesting changing the business climate into a type of a “kumbaya” atmosphere in which we all hold hands and sing around the campfire. However, considering the influence of the sun’s warmth from our story above, what would be the possible outcome of the elimination of Non-Compete Agreements in favor of a Structured Best Practices Leadership Program?

 The introduction of a Structured Best Practices Leadership Program might include:

·       Accountability for leadership to provide transparency with clear communications

·       Reviews, feedback, through established goals and objectives. Employees know exactly where they stand

·       Implementation of a strong employee retention plan. The best talent will not stay if they don’t feel well regarded.

·       Acknowledgement that successful people are goal driven. Their career path may carry them to another employer. Considering that is likely, has leadership developed a well-planned succession program?

·       Once a critical talent leaves your employment, it could be the beginning of a new relationship, not the end of one. They could turn into an advocate, a partner or return back to your company with more experience at in more senior level in the future

For those who have experienced the battle from a contentious Non-Compete Agreement, you would surely agree that there has to be a better way. Is using a version of the alternative Structured Best Practices Leadership Program an easy option? Definitely not. At the end of the day, does it deliver a better outcome to all involved parties?

Just ask the sun. 

Non-compete agreements