The Ultimate Non-Compete

Earlier this morning I emailed the latest draft of six Employment Agreements to the business owner with requested revisions. The main reason for the creation of these Employment Agreements was the confidential information, non-compete, and non-solicitation provisions in the agreements. The company had a bad experience with a key leader leaving and attempting to hijack a significant number of customers, employees and business territory. Understandably, it left a sore spot that still hurts.

Anytime I draft a contract of any kind, I always imagine either enforcing or defending it in a courtroom. I call to mind the applicable law and envision the circumstances of the enforcement or the challenge to validity. Then I try the case in my head attempting to anticipate what each side will argue, what evidence will be presented and how the court is likely to rule. Since the language of the contract will only be important if or when a dispute arises and litigation is on the horizon, it makes sense to anticipate the end game during the drafting phase.

Drafting employment contracts, however, is a tricky business. Protecting confidential information and preventing solicitation of customers and employees is relatively straightforward. Court generally understand the legitimate business interest in protecting these key assets. Non-compete agreements in the employment context, however, are viewed with skepticism and are weighed against the employee's legitimate need to find gainful employment with the skills and experience that employee has (which obviously includes that employee's tenure at the company).

In my role at my current company over the past few months, the reality that the ultimate non-compete has nothing to do with contract language really struck home.

A quick shout out to my brother, Blaine Hanson, who is rocking his role at LinkedIn. (Very proud of my little bro and his accomplishments!) During a car trip to see our mother several months ago, my brother explained to me that every company has two brands. We are very familiar with our Customer Brand. We spend hours and dollars trying to get the Customer Brand right and for good reasons. However, we often neglect our Employer Brand. As my brother put it, "Everyone knows what a Coke tastes like. But what is it like to work for Coke?"

Establishing and maintaining an excellent Employer Brand is the absolute best non-compete strategy there is. When you invest hours and dollars in maintaining a positive image in the mind of your employees, they do all the things in the employment marketplace that happy customers do in the commercial marketplace. Word gets out that your company is where people want to work. Maintaining discipline within the ranks actually gets easier because corrections are taken as encouragement toward improvement instead of punitive actions to keep someone in their place. When employees separate, they leave with fond memories and not with plans to undermine the company. An excellent Employer Brand also reinforces the company's position when in conflict with those thankfully rare employees who are hell-bent on the company's demise no matter what the reality of the situation really is.

I am more convinced than ever that an excellent Employer Brand is not just a good idea or a positive HR policy. An excellent Employer Brand is just good business.