It's Not That Kind of Non-Compete

There has been a lot of chatter about the imminent demise of non-competes nationwide.

• The FTC is concerned with non-competes between an employer and an employee that restricts the worker from competing against the employer after the employment relationship ends.

• A National Labor Relations Board memo warns that employment noncompete clauses for nonmanagerial employees are illegal.

Did you count how many times some version of “employ” was used?

Hear this: That chatter does not apply to the non-competes in services agreements between two businesses.

I have been responding to the confusion about this one-on-one. When I heard the following, I knew a broader response was required: “It doesn’t matter what the contract says since it isn’t enforceable anyway.”

First of all, non-competes are enforceable in your B2B services agreements with your clients and subcontractors.

Second of all, never sign something with your fingers crossed behind your back.

Best worst-case scenario, you are starting the relationship with a lie. Relationships are among your most valuable assets. The contract is the opportunity to lay the foundation for a relationship that works for both parties, hopefully for many years.

Worst worst-case scenario is a lawsuit! Do you want to resolve this self-inflicted wound with lawyers? Yeah, I didn’t think so.

Don’t sign anything that you (i) don’t understand or (ii) don’t agree to comply with. Period.

Questions about non-competes in your client services agreements?