Shownotes
In this episode, we discuss the Federal Trade Commission's recent ban on non-compete clauses in the United States, effective April 23rd. We delve into the implications for both employees and employers, the adjustments companies need to make, and the importance of fostering a strong workplace culture. Through personal experiences, we highlight how the absence of non-compete clauses can lead to greater employee retention and motivation, leveling the playing field and ensuring accountability among employers. Tune in for a comprehensive take on this significant regulatory change.
The Logistics & Leadership Podcast, powered by Veritas Logistics, redefines logistics and personal growth. Hosted by industry veterans and supply chain leaders Brian Hastings and Justin Maines, it shares their journey from humble beginnings to a $50 million company. Discover invaluable lessons in logistics, mental toughness, and embracing the entrepreneurial spirit. The show delves into personal and professional development, routine, and the power of betting on oneself. From inspiring stories to practical insights, this podcast is a must for aspiring entrepreneurs, logistics professionals, and anyone seeking to push limits and achieve success.
Timestamps:
(00:00) - FTC Bans Non-Compete Clauses
(01:10) - Employer Accountability and Retention
(01:53) - Personal Experiences with Non-Competes
(02:33) - Non-Solicit vs. Non-Compete
(03:33) - Employee Loyalty and Compensation
(06:18) - Final Thoughts and Future Updates
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Transcripts
On April 23, the Federal Trade Commission approved a ban against all non compete clauses in the United States.
Speaker A:We are very familiar with the non compete.
Speaker A:We both sat out two year, I call them sentences.
Speaker A:But with that, what's your initial take on the banning of non competes?
Speaker B:Yeah, a lot still needs to happen.
Speaker B:You know, I'm not going to get in the weeds on the actual timeline and what needs to go into action for it to be active, but it looks like more than likely there are going to be changes with the knockout Petes going somewhat out the window if we assume that's what happens.
Speaker A:Sure.
Speaker B:The playing field is leveled, competition is good and a lot of big players hold their employees and not competes.
Speaker B:All employees for the most part.
Speaker B:So a lot of the way it's written, from what I've read, top executives will be held to not compete.
Speaker B:Sure.
Speaker B:Lower level employees, which is majority of the industry will not be held to a not compete.
Speaker A:I can see that.
Speaker B:So what does that do?
Speaker B:It levels of playing field and puts more accountability on each company to invest in their employees, in their company and their culture to retain that talent.
Speaker B:That's what they want to do.
Speaker B:If they don't care, say goodbye.
Speaker B:It's going to be an exodus.
Speaker A:Yeah, I mean I think the employee retention piece is huge.
Speaker A:Where what are we doing to keep these people happy and engaged and pushing them to achieve, you know, greater levels.
Speaker A:Whereas in the past they would have to sit out a certain period of time and then they could go to a different company.
Speaker A:Well, now they can.
Speaker A:You know, it's kind of like the transfer portal almost.
Speaker A:Right.
Speaker A:Where you're, you're going into the transfer portal and you can flip.
Speaker A:Right.
Speaker A:I think that's, that's something that we need to think about especially with our company.
Speaker A:Like today we don't have a non compete but we do have a non solicit.
Speaker A:So that's something that we try to do the right thing by our employees all the time.
Speaker A:And I'm glad to see that something like that is happening even just because we dealt with it.
Speaker A:Right.
Speaker A:And I know that it personally, I went through so many emotional things during that time that I'm glad that nobody else really has to go through that.
Speaker A:Especially if you're, you know, an operational support person, you know, making fit 50, $60,000 a year.
Speaker A:There's no reason that they need to sit out a year or sit out a certain period of time to withhold confidentiality or withhold confidential information.
Speaker A:Yeah.
Speaker B:And that's what a lot of it has to do is not solicit versus not competing, not compete.
Speaker B:It's confidentiality agreement.
Speaker B:They want to make sure that you're not going to a competitor in sharing trade secrets.
Speaker B:I'm sorry, I was mid level manager.
Speaker B:I don't know what trades.
Speaker B:I remember some clients after the two years, but sure, I didn't break the non compete.
Speaker B:I didn't care.
Speaker B:You still had to go back to work.
Speaker A:Yeah.
Speaker B:And land that business.
Speaker A:You still got to close them, man.
Speaker B:It's not like I, I had a, you know, cheat code that I pulled from my previous.
Speaker A:Flip that switch.
Speaker B:Yeah.
Speaker B:That's not how it works.
Speaker B:So we understand that a knock a pete is going to hinder employees from, you know, advancing in their life and their careers.
Speaker B:We don't believe in that.
Speaker B:So.
Speaker A:Right.
Speaker B:We want to be very, very intentional with how we build our culture so that we are retaining the people that we bring on board.
Speaker B:We are investing time, money, energy into these employees.
Speaker B:It's important.
Speaker B:It starts in the hiring process.
Speaker B:But we want to bring these people in and make them feel like they don't ever need to look for another job.
Speaker B:They're happy with where they are.
Speaker A:Yeah.
Speaker B:In fact, we had an employee that, that was looking to leave.
Speaker A:Yeah.
Speaker B:He had a competitor offering him, offering him more money.
Speaker B:And we had a conversation and this is an employee that's extremely loyal.
Speaker B:He works his ass off.
Speaker B:He's great for our team.
Speaker B:But he wasn't where he was financially.
Speaker B:That's on us.
Speaker A:Correct.
Speaker B:We didn't know he was on.
Speaker A:I'm glad that he came to us and had that conversation and he had, hey, I got this offer and what do you guys think?
Speaker A:Like, okay, now me and you need to act on it.
Speaker A:Right.
Speaker A:And we need to put our money where our mouth is and you know, make sure that he feels valued or he feels like he's being compensated for the time and effort that he's putting in.
Speaker B:And he had every right to do that.
Speaker A:Yeah, agreed.
Speaker B:You know, I wish we would have known before.
Speaker B:And again, that's the piece that's on us.
Speaker B:Yeah.
Speaker A:For sure.
Speaker B:You're not always going to know how someone, an employee or someone on your team's feeling.
Speaker A:Yeah.
Speaker A:You'd like, you'd like to be involved, you know, but it's, it's hard to do.
Speaker B:Yeah.
Speaker B:That says a lot about him.
Speaker B:He's an awesome employee.
Speaker B:Where he was getting his work done, he was still busting his tail.
Speaker B:He just had this weight on his shoulders where he entertained the conversation.
Speaker B:The company that was, you know, Reach out to him.
Speaker B:They do have a not compete.
Speaker B:They're a good company.
Speaker B:We know.
Speaker A:Yeah.
Speaker B:But our biggest piece was we don't have a non compete because we want to be held accountable.
Speaker A:Yeah.
Speaker B:As employers to our employees, we want you all to hold us accountable to make sure that we do what we say we're going to do.
Speaker B:If we are about people and we want to make an impact and help people reach their goals, how's it not all non compete is going to do is allow us to get lazy and complacent with what we say we're going to do.
Speaker B:That's all that does well.
Speaker A:And I think you can stand behind it too.
Speaker A:Right.
Speaker A:I think, you know, folks with like I am very much against the non compete personally.
Speaker A:I think it gives those companies an area to hide behind it.
Speaker B:Right.
Speaker A:Oh, I can treat my employees like shit but I can hide behind and I compete.
Speaker A:Right.
Speaker A:Whereas like now you said it earlier and I love this but it levels the playing field and drives more accountability to the companies that are out there that have one to say you need to take care of your employees and if you don't, there's not a ton of repercussions, you know, for them going to work for a competitor.
Speaker B:Yeah.
Speaker B:And for that competitor that did reach out to our employee, like it's fair game.
Speaker B:That's.
Speaker B:It makes it competitive, it makes it fun.
Speaker B:It holds us accountable from a competitive standpoint as well.
Speaker B:But you know, just a quick update for that competitor.
Speaker B:You know that employee, we retained him, we paid him more, we gave him a bonus.
Speaker B:He's broken his record twice in the last two weeks.
Speaker A:Yeah.
Speaker B:And he's phenomenal.
Speaker A:Yeah.
Speaker B:So we appreciate you holding us accountable and checking us.
Speaker A:There you go.
Speaker B:We got better because of it and we're looking forward to get better.
Speaker B:Moving, moving forward.
Speaker A:Yeah.
Speaker A:Excited, excited to bring you guys more information as we learn more about the non compete scenario.
Speaker A:Best of luck out there.
Speaker B:We love the guy.
Speaker B:Yada yada yada, like that's a huge plus for me.
Speaker B:You know I mentioned this already but history of promotion, someone that's like never settling, does not accept mediocrity.
Speaker B:They're willing to put in the work to continue moving up where that's career wise, financially, personal development, whatever it may be.
Speaker B:Someone that wants more and hungry for more.
Speaker B:Those are the type of people that I want.