A buddy of mine is the COO of a 40-person ad agency in Kansas City and he just texted me this article: FTC bans noncompetes, making it easier for millions of workers to quit.
My response was simply: “WHAT”
This is obviously huge news. Many states had already passed legislation banning non competes. But this is on a federal level.
Will Employees Quit Their Job Because of the Federal Non Compete Ban?
Yes. My prediction is that the job market will become incredibly dynamic and saturated with top talent due to employees leaving their employers for a multitude of reasons.
Reasons employees will leave with non-compete ban coming:
- To start their own business selling or providing similar products and services
- To leave large corporations with large legal pockets known for litigating non-compete violators
- To enter the gig economy and work as a freelancer with better work-life balance
- To seek better compensation or more aligned job roles
How Will Marketing and Advertising Agencies Be Affected by the Federal Non Compete Ban?
Agencies, at least from my perspective, have been notoriously strict policing non-competes. I have friends in the space who have dealt with large lawsuits and been forced to pay substantial sums of money to get these things to go away.
That will no longer be the case. And part of me believes the companies who will be hit hardest by the new non compete laws will be fortune 500 and enterprise level orgs who have giant legal budgets to actually file charges against the little guys.
They have been bullying startups for decades. That comes to an end soon.
And I don’t blame them for doing so. They have the financial resources to draw the line. Might as well draw it to protect your market share.
However, this option is getting pulled out from under them.
That’s probably a good thing. It forces large companies to continue innovating at a product/service level, and continue to drive company culture initiatives that Millennials and Gen Z wants. Work life balance, maternity and paternity leave, health and wellness benefits, and bosses who aren’t toxic.
Here’s the Bottom Line
The bottom line is this: employers who have cut corners on culture, comp, benefits, and innovation are going to get hammered by this. And frankly, it’s 2024. If that has not been your focus in the past 5 or 10 years, then how sorry can I feel for you?
Employees, congratulations. You are now free to move about the country (or companies). If you are sitting on the edge of starting your own thing but a non-compete is stopping you, see-ya.
As someone who has been both an employee AND employer, I feel like I have a unique perspective on this.
My company would be about twice the size as it is right now if these bans were in place in 2020. Just a fact. I had to do so much to avoid violating my con-compete from Thomson Reuters, it stunted our growth bigtime.
My Next Move:
As an employer, when I heard this news my eyes grew wide and a giant smile creeped across my face. I know the top talent I want at my company. And guess what? I haven’t been able to touch them because of non competes. They won’t quit or leave because they aren’t risk averse. And they want to stay in the marketing vertical.
Well, that problem just disappeared, and I’m about to go after them hard.
Strap in folks, it’s gonna be a wild ride.
