The Talk About Non-Compete Agreements: Are NDA and Non-Solicitation Better Options?

Posted on March 14, 2024

As a recruiter, I’ve always been asked about non-competes and whether they have teeth.  I don’t try to pretend to be a lawyer (can hardly spell it) but I know there’s been a lot of buzz lately about non-compete agreements, especially with news that the FTC might make a decision on a ban as early as next month. This has sparked a big conversation about what this could mean for both employers and employees.

Understanding the Reach and Controversy of Non-Competes

Let’s look at the numbers first. The FTC says about 18% of workers1 are tied down by these non-compete contracts. That’s a pretty significant chunk of the workforce, so it’s no wonder people are talking about it.

Non-compete agreements have always been a bit controversial. Some folks say they’re crucial for protecting a company’s secrets and unique ideas. Others argue they just hold employees back and limit healthy competition.

Exploring Alternatives: Non-Disclosure Agreements and Non-Solicitation Agreements

But here’s the interesting part. More and more people are starting to think that Non-Disclosure Agreements (NDAs) and Non-Solicitation Agreements might be better options than traditional non-compete deals. An NDA basically keeps ex-employees from blabbing company secrets, while a Non-Solicitation Agreement stops them from poaching clients or staff.

The big argument in favor of these alternatives is that they can still protect a company’s interests without all the fuss and restrictions that come with non-compete agreements.

Evolving Views on Non-Competes

There’s also this idea that really great companies shouldn’t have to rely on non-compete agreements to keep their best people. But then again, some industries just need extra protection for their special know-how and competitive edge. So, having solid NDAs and Non-Solicitation Agreements can be crucial for these businesses.

As the debate about non-compete agreements goes on, it looks like the focus is shifting. The potential delay in the FTC’s plan is making everyone think about what could happen next. And the fact that more attention is being given to strong NDA and Non-Solicitation Agreements shows that things might be changing in how we protect business interests and support innovation and growth.

April is just around the corner, so it’s possible we could see some major changes in the coming months. Be sure to check back and follow me on LinkedIn for more insights.

1 https://www.cnbc.com/2023/01/05/us-targets-non-compete-clauses-that-block-workers-from-getting-better-jobs.html