After a long Labor Day weekend of pondering more on the Georgia Restrictive Covenant Act, I think I’ve isolated my core problem with the legislation: it enables a vindictive employer to really screw someone’s life up. And let’s be honest, we’ve all worked for someone like that. Whether it was a first job where you had to do whatever was necessary to break-in, or more likely you’ve had to recently backslide in rank, prestige and compensation due to the economic conditions. We’ve all had to take a job we didn’t want to make it to the next level. Imagine now that this decision is even more painful given an overly aggressive non-compete. Will you not do what it takes to break into a new industry, or will you let your family go hungry based on principle? Clearly not.
Those who argue in favor of HB173 are quick to point out that the courts won’t allow predatory employment practices to run wild. My question is: How many of these scenarios will ever see the inside of a courtroom? The answer: very few given the cost of litigation and the chance an individual could ever afford to assert their rights. It’s much more likely – and insidious – that this creates fear, uncertainty and doubt for employees as they calculate whether their employer will come after them legally following a job change. Some will be so risk-averse they will never even attempt to better their employment situation. That sure doesn’t seem to embrace our values as a nation of hard-working immigrants – regardless of which generation and where our families are from.
The answer is employers are 100% responsible for creating an environment that draws the best and brightest talent. And guess what? There aren’t many examples of companies or CEOs who truly understand this principle – and are able to put it into action. Two examples come to mind: Tony Hsieh of Zappos and Ben Chestnut of MailChimp. Both have created companies built on cult brands, and have become that ever-annoying (but absolutely desirable) catch phrase of HR people worldwide: ‘an employer of choice’.
You think these guys stop thinking about how to please their customers or improve their service to consider how to lock their employees down tighter? I’d be willing to bet they take employee recruiting and retention as personal responsibilities. They understand a contractual relationship is nothing more than that – it’s great for dealing with external suppliers, but not much of a way to motivate and empower employees to deliver their best work. For that, it’s all about Poetry Spam.
So in a perfect world, HB173 is irrelevant even if the citizens of Georgia are bamboozled into making in law in November. For the best employers, there will not be a ratcheting-up of contracts. Perhaps the opposite even happens: a new point of differentiation for employers could become a fair non-compete/non-solicit agreement. This has the potential of pairing superstar employees with great companies – a scenario that drives benefit for the entire ecosystem, including increased tax revenues.
Yet there will naturally be an opposite end of the spectrum where the employer is hell-bent on onerous terms of employment. Think of these as the buy-here-pay-here versions of jobs. Ideally, natural selection keeps people away from such employers, but it’s my fear that less-informed folks are more likely to fall for the pitch – yep, it’s the job equivalent of a 28% APR used car loan on a 1999 Ford Probe GT.
Realistically, most employers will fall somewhere between these two outlying points, but the gray area will be just as painful. At a minimum, it causes an employee to consider legal fees when changing jobs. I hope that employers are smart enough to view the world through Zappos or MailChimp eyes, but I fear the almighty question of legal ROI will empower mediocre employers to hang on for dear life.
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