Why Non-Competes Should be Illegal

Is it safe to say that people don’t leave companies as much as they leave their manager or the management in general? Sure, there are the nomadic workers that seem to float from company to company but come on, these are a minuscule number in reality. An individual may come up with multiple reasons for their decision to “put their names out there” such as the need to expand their skills, take on new challenges, or to avoid some believed inevitable ceiling or perhaps a relocation. All of these reasons have likely partial truths, but, that is not why they are testing the outside waters. It is always more fundamentally based — Synaptic Divide. They cannot be passionate anymore. Who is at fault? Is it the people? The companies? The immediate manager? Human Resources? The CEO?
In my professional experience, these are just not the right questions. Asking who is at fault means that there is a singular person to allocate blame. Even the most well-intentioned CEO’s can find themselves unknowingly putting, or allowing, people under them that become the navigators of “unnovation” and the pins that prick the balloons of passion amongst the teams the company depends on. This is often hidden, or course, amidst the perception of chaos and the steadfast strives for “shareholder value.”
Synaptic Divide happens when there is a hysteresis of positive energy and passion between the individual and the organization’s management. In my experience, this happens exclusively because of the frictions between the functions of the Ultimate Human Dilemma. So when this individual decides to go elsewhere to a company that values them in the right way is it fair to punish with a non-compete? This is not to be confused with Confidentiality agreements.
Non-competes are a prison sentence and should be illegal. Why am so adamant about this? Because it doesn’t matter where this person goes, who they go work for and in what capacity they operate at the next company. If the company itself is that paranoid that any one person can topple their omnipotent greatness by going to a competitor, then the company itself is too sick to more than fantasize about the sand it pours into its hourglass with each month’s close of the financials.
It is a form of punishment to the individual for not fitting in. It is a derivation from the transformed Personnel Department that became Human Relations then Human Resources to the now ASSROID (Advisors to the Secretive System of Regulatory, Occupational, and Institutional Defense.) Any company that makes you sign one to be hired is basically saying to you, “there’s a good chance you will wilt here and when you leave, we have to ask you to bag groceries for two years because we are terrified of the truth.” The same goes for companies that have to start shedding their bacon to make the numbers and have you sign one yourself to get an allotment of bacon as a severance package as they let you go.

These very same companies that are the problem have their ways of practicing what I call “Understate-Exaggerate.” I overheard a story once where a company tried to hire someone who would have been held to a non-compete. The company who wanted to hire this person said they were not concerned as they could have them “assigned” to a foreign business unit. This very same company went through a downsizing (bacon sell-off using the Bacon Rules of Business). An employee of that company then got hired by the company of the original character in this story. This particular person refused to sign the severance agreement, that included the standard non-compete and walked away from the dangling bag of cash, aka bacon. This very same company that tried to play technicality to get around one, was this time threatening legal action even though there were no grounds to do so, since, they refused to sign it and forfeit the “thank you for your service” parting gift.
Listening to what global brands are saying to their supply chains about the need for industry collaboration, I often hear these same companies focus on “confidentiality.” It is as though they believe they are the envy of the prom and have all the solutions to the world’s problems that once someone peeks behind the curtain, the sky will start falling. Here’s the truth: “You can give someone the blueprints to the Bat Mobile, but they won’t build it.” Why? Because they don’t know how, or more pertinently, how to justify the resources or define the project in a way that can garner management support. The healthy companies that could build it, are already being stealthy and don’t need it. They are well down their own paths to building something great.
“Don’t worry about people stealing your ideas. If your ideas are any good, you will have to ram them down people’s throats.” — Howard Aiken
My message to these companies: focus on getting healthy rather than punishing the people who choose to leave. If, they will ever become your disruptor, forcing them out of their field of expertise for a year or two only accentuates the prize. I said once in a previous blog that when you press a button to get the cookie, it is far more effective to focus on the buttons than it is to make the cookies harder to get. You only increase the desire for them. When top talent asks for a divorce, taking the cookies is a futile exercise. Then how do you focus on the buttons? You cannot take them away because you do not own them. This is what a free market is. What you can do, however, is fix the leaks in your boat’s hull. Fix your company and your divorce rate will plummet.

Helping companies get healthy again is what my company does. But it isn’t easy because it requires a hard look into the mirror. This is what we call The Mirror Test. From experience, one of the first things the company has to wrestle with is the difference between being a leader and being an administrator. In my experience, the companies that need help the most are the ones that are “uncomfortable” with middle and upper-level managers that are inspirers and motivators and lead from trenches. The ones that are taking on their own role of fulfilling Bacon Rule #3 are not living up to the expectations of being an “administrator.” What does an administrator do exactly?
They “meet, monitor and measure” the people in their organization. Exactly what the Board of Directors and shareholders want: managers who focus on results and nip in the bud the tomfoolery with wild goose chases in the field.
People become knobs to turn when results to shareholders are not being delivered fast enough. They, as a result, do what every administrator does, they start tweaking these knobs. One of the clear signs of Synaptic Divide is when these “knobs” are getting increasingly frustrated as they try harder and harder to illustrate what needs to be done to satisfy shareholder greed. The administrator cannot see it because they are unable to “interpolate” the information. They do not spend enough humble time in the market for the firsthand experience to, therefore, build the database for which to serve the interpolation process. Whereas a leader is in the market and seeing it firsthand. They leave the HR-related administrative details to their department admins. The people that should be serving this function, who by the way should be recognized, appreciated and compensated for doing this job well.
Rosabeth Moss Kanter stated it perfectly in her Harvard Business Review article titled The Middle Manager as the Innovator:
“Change masters don’t sit in the executive suite, but they’re not on the margins, either. They’re consummate insiders who get things done by working with other people. The attributes of an innovative middle manager are comfortable with change, have clarity of direction, thoroughness, and preparedness, participative style, persuasive, persistent and discrete. Creative managers listen to a stream of information from superiors and peers and then identifies a perceived need. The most successful innovations derive from situations from a number of people and a number of areas make contributions. To tackle and solve tricky problems, people need both the opportunities and the incentives to reach beyond their formal jobs.”

The key word here is “formal.” Once the company has started showing the signs of sickness, for which the Mirror Test would be self-evident, these formal executive roles are ones of administration. Administration for driving results to shareholders through the energy of the humans they control. Not from how they reach beyond it such as building relationships that satisfy the 3rd Bacon Rule. And when people decide to leave these administrators, they are forced to bag groceries for 1–2 years as punishment for nonconformance and for having brain functions that are substantially different than the organization itself.
I rest my case. When an employee divorces you, find out why, but don’t tell them they cannot practice their art as it will not result in what you think it will. Be kind and sincere in honoring confidentiality and apologize for having failed them that led to the divorce.
Kelly Williams, founder of UP-Factor LLC, a consulting firm that helps companies get better if, they both need and want to get better.
kellyw@up-factor.com
614–787–7867
