Non-competition agreements are often used to restrict the future activities of employees. But Joe Singleton, CEO of Able Moving & Storage, says this is an outdated approach.
Able Moving & Storage, since its inception in 1987, has never asked an employee to sign a non-competition agreement. We never will.
We have experienced organic growth upwards of 500 per cent in the past 10 years – and we have achieved this without needing to ‘own’ our employees. Millennials impacting the forward-thinking companies of the 21st century reject the caged-chicken mentality that comes with the use of instruments like the non-competition agreement.
The concept of free-range employment embraces the idea that the responsibility of fostering and creating an atmosphere where interest and creativity are valued lays squarely on the shoulders of corporate leadership. Companies with the most elaborate non-compete agreements that are willing to litigate them frequently are probably the ones that are most afraid of fair competition. Fear-based decision-making is shameful, and when companies try to hide this, they become less desirable to work for. Transparency is the currency of the 21st-century workplace, and employees don’t want to work for fearful companies.
Frequently we have to turn away executives and labourers seeking employment with us due to ludicrous non-competition agreements they have signed with previous employers. We have been served by attorneys based on having only conversations with individuals and been informed that they intend to subpoena all of our records should we hire said individual. The idea of controlling someone’s vocational prospects in maybe the only industry they know is abhorrent to me.
Jonathan Pollard, competition lawyer and principal of Pollard PLLC, which focuses on competition law, states: ‘Simply put, in the 21st century, there is virtually no principled argument for non-compete agreements for all but a very small segment of high-ranking, highly compensated employees, and then only when their defection to a competitor truly and imminently threatens unfair competition.’
Biomedical companies investing millions in cancer research or defence contractors working on new missiles to protect our country might have legitimate reasons to request that their employees sign some sort of non-competition agreement. Uncertain ownership of their research and development might make such worthwhile investments hard to undertake. The moving industry is not building missiles or curing cancer.
Differences between no-solicitation and non-compete agreements are noteworthy in this discussion. Able has earned its customers, and when we hire an executive to manage a house account, we feel justified in asking them not to call on them if we part ways. In the instance of an executive developing a relationship with a client while at Able, or bringing one to Able, I have no interest in trying to dictate terms whatsoever regarding the relationship, other than to pay them well for it and thank them profusely for giving us a chance to serve their client.
Our Director of International, Michele Eckert, says: ‘Along with the totally positive environment that permeates the company, I view the absence of negative agreements like the non-compete to be helpful when recruiting executives to join us.’
Clear indications for me that our policies are attractive to the marketplace were witnessed by the entire DC moving industry when the professional core of the now defunct regional giant Office Movers chose Able for its new home. Released from their non-competition agreements, all were welcomed at Able within days. I am proud to say they all remain employees two years later. Without non-competition agreements, I strongly believe that the regional leaderboard in our industry would look a lot different.
All reasoning I have pointed out so far could be considered small when positioned alongside what is the biggest reason of all that non-competes are bad for our industry – which is that customers get bad service because of them. Forcing employees to work for a company they do want to work for will change the attitude they bring to the job in almost all respects, and you can forget about high interest or creativity levels. Customer loyalty depends on the service they receive.
When one of our employees chooses to leave us, on good terms, because they want to work for someone else, we wish them the best of luck and they frequently remain friends. The free-range employment concept we adhere to maintains that the locks on our doors are solely there to keep the bad guys out, not to keep the good ones in. We are proud to say that a majority of the good ones stay with us for the long haul and are compensated at industry highs.
One of the biggest contributors in our success is the fact that we know our employees are with us by choice. Why would we ever take that away from them?