'Non-compete clause' in employment contract reveals company doesn’t care about you

As a professional, it’s your responsibility to scrutinize “employee-first” and other similar claims in search of the truth

  1020

Every firm in the business world has some mention in their mission-vision statements, corporate news, or press releases about how they are an employee-first company, but this is almost always lip service. The vast majority of companies are only out to protect their own interests, even at the expense of employees, and they make their lack of concern as clear as day from the moment they hire people. How can you tell? Just look at the fine print of every employee contract. Or better yet, observe their actions.

Almost every employee contract will have a clause buried deep in the text stating that the employee cannot work in the industry for up to one year, sometimes longer, after they leave the hiring company. This clause may make sense for C-level executives or vice presidents who would have access to trade secrets and the strategic direction of the business, but companies can apply this clause to almost anyone, even fresh graduates who are working in an entry-level position. For anyone who is not an executive, a non-compete clause means the company doesn’t care about your career growth the moment you step out of the door.

If for example, a student graduates with a degree in finance and gets a job at a brokerage that requires a non-compete to work there, how can he realistically advance his career beyond that position? His whole education, background, and experience is in that field, but the non-compete would demand that he sit on the sidelines for a year if he leaves, not earning from his domain expertise.

It would be fine if companies compensated employees for following a non-compete, as they do with executives with what is known as the “golden handcuffs” or “golden parachute,” but they usually do not offer any remuneration for the rank-and-file staff that would need this most. The general attitude toward employees stuck with a non-compete and the inability to work in their chosen profession is “tough luck.” When these companies refer to their culture as “employee-first,” they might actually be referring to the shooting order of their firing squad.

The worst part of non-competes is that most employees have no idea what they are agreeing to when they sign an employee contract. The person walking them through the document, be it a recruiter, HR generalist, or hiring manager has little incentive to explain what the non-compete actually entails (for instance, does it just apply to companies in that vertical, or anywhere where he might practice similar skills?) Since their goal is to just get you to sign on the dotted line as quickly as possible, they’ll gloss over the non-compete and a host of other important clauses (non-solicit, non-disclosure), as quickly as I am doing here, their future be damned.

Due to the lack of education about non-competes, employees often do not know they cannot work in the same industry or field until their exit interview, when they are coldly told that they may face legal ramifications if they do. Others do not find out until they get a threatening legal letter. The goal of such legal posturing is almost never the enforcement of contract - it’s intimidation, if not revenge, as is evident with what happened in the story of one TaskUs executive. His former company made him go through the rigamarole of hiring a lawyer and going to court, up until the case would actually go to trial, at which point they quickly dropped the suit. Their goal was only to waste the leader’s time and money. If some companies right now are patent trolls in the legal world, there are also countless companies trolling employees who dared to move on.

Some members of my team have encountered non-compete trolls. One company claims that TaskUs is not their competition, but this did not stop them from resorting to legal intimidation as soon as we started growing as an organization. They sent threatening legal letters to the employees who eventually left their organization for ours on their own volition. Non-compete trolls have efficient standard operating procedures for their legal bullying. They have it down to a science.

A reminder is in order: The companies that quietly file lawsuits against former employees are the same ones that loudly proclaim how well they treat their employees. To them, there is no hypocrisy at work here. They care about their employees, sure, but only up to the point that they remain with the company. Beyond their resignation date, they become people whose skills and knowledge must be corralled away from productive use.

To me, this approach is deeply flawed. If you truly cared about your employees, you would not exert control over their future. Rather than push non-competes that pressure employees to stay with your firm, you should instead focus on becoming a company that they would voluntarily want to stay with for the long haul. Part and parcel to this, ironically enough, is trying to build employee skills and knowledge with no strings attached. A good company always leaves the employees with improved skills and better professionalism when they left than when they started.

If you’re in an industry with high attrition, adopting this truly employee-first orientation can be tough, but it’s one you must commit to over the long-term. At TaskUs, we’ve encouraged team members to pursue passion projects outside of work, donate to charity with every purchase of their employee meals, and even learn how to leverage our own esports team to reach our millennial audience, and we are always looking for more ways to develop our employees. Will we ever have enough skill- and knowledge-building activities? The answer, of course, is no, but we will never stop trying, and that is the only type of “competition” you’d want from the company you dedicate your days to: The drive to outdo others in providing the best resources to develop you as both a professional and as a person.

As a professional, it’s your responsibility to scrutinize “employee-first” and other similar claims in search of the truth. You must distinguish between the few companies who really care about their employees from the vast majority who do not. Failure to do so will perpetuate the larger culture of abusive employers who wield non-competes as a weapon and may spell your own doom once you sign on the dotted line: You may find yourself working in a job you do not like for a company that you do not trust, entrapped by the very name that you once sought to build.

.............................................

Robert Hayes serves as Senior Vice President of South East Asia at TaskUs, a 10,000 headcount customer experience agency that power some of the world's most recognized apps and counts 13 unicorns as its clients (companies with a 1 billion valuation), offers its expertise in maximizing talents and combining their skills with innovative technologies to help business scale quickly. He is responsible for the sustained growth of employee base and increased employee net promoter score of 66% at par with Apple, Lego, Disney and Harley Davidson quarter on quarter. Robert rose from the ranks from a frontline team member with over 15 years of experience.