FTC’s Proposed Noncompete Ban

How it affects recruitment and retention

conversation, not an interrogation. A few questions you might consider include:

1. What keeps you working here?

2. If you could change something about your job, what would it be?

3. What would make your job more satisfying?

4. What can I do to best support you?

5. If you were to leave, what would be the reason?

It might be difficult to hear what an employee has to say. But it is always better to hear it before your employee tenders a resignation. A stay interview is an opportunity to show your employee that you care and are committed to the employee’s future.

Market analysis of pay scales and retention bonuses. Recruiters often get an employee’s attention with the prospect of a few extra dollars. If you have not done a market analysis of your pay scales in a few years, you should consider one. If you’re underpaying your employees based on market rates, you need to make a market adjustment. The last thing you want is an employee to leave your business for a few extra dollars. You’ll spend far more recruiting and training a replacement than providing a modest raise to a current employee.

You may also want to consider a retention bonus. A retention bonus provides an employee with extra lump sum payments at certain agreed-upon intervals if the employee remains employed with your company. When properly structured, retention bonuses can be a great way to reward and encourage loyalty.

Nonsolicitation agreements. If the FTC’s noncompete ban goes forward, some of your top employees will most likely leave for what they perceive to be greener pastures. You need to be prepared for this and consider adopting nonsolicitation agreements. A nonsolicitation agreement prohibits your employee from soliciting employees or customers when they leave to work for a competitor. In other words, a nonsolicitation agreement prohibits poaching of customers or employees. While it does not keep an individual out of an industry or from going to work for a competitor, it can be a powerful tool for ensuring your former employee does not engage in unfair business practices.

The FTC’s proposed noncompete ban presents opportunities and risks. You need to think about what you’ll do to keep your best employees and protect your company. Stay interviews, market adjustments to pay, retention bonuses and nonsolicitation agreements are just a few of the things in your toolbox.

No matter what you do, make sure you brush up on your company’s data, confidentiality and security policies and practices. If your employee walks out the door for your competitor, he or she should not be bringing anything from your company with them.

Anders Gillis is a labor and employment attorney at Parker Harvey PLC. He can reached at (231)486-4507; agillis@parkerharvey.com.