BRANDEblog

Thursday, February 01, 2007

The “Oy” In “Loyalty”

In a recent edition of Inc. Magazine, Joanne S. Hovis of Columbia Telecommunications Corp. wrote in with an interesting quote: "My engineers have access to all kinds of confidential information. Can I (and should I) require them to sign a noncompete agreement?"

As a quick response, the author of "Ask Inc." said: "The more employees know about your business, the more they can help you -- or themselves if they decide to set up shop across the street or light out for the competition." In other words, a competent and eager employee can be both a positive and negative force to your company.

Michael Shetterley, an attorney for Ogletree Deakins, believes in making a new hire sign such an agreement, but questions the validity of one that is highly binding. For example, claiming exclusivity for too much territory can be a problem: "'Employees may not work for any telecom company anywhere in the country for years' won't fly with most courts."

The courts of Maryland being one example. RelianceNet CEO Pat Cooley makes employees sign noncompete forms but only enforces them in instances related to losing trade-secrets or workers to competitors. Explained Cooley: "We don't want to block or limit anybody from being successful in the future, but there are things we need to do to protect our business interest."

TicketCity.com CEO Randy Cohen feels similar to Cooley, believing that his employees should be entitled to future success, but sees the noncompete form as a test of loyalty: "If they seem worried about signing it, they're not looking at the big picture and seeing themselves as part of the team, so you probably don't want them anyway." His form includes a clause that bars these employees from working within 500 miles of TicketCity.com's headquarters. Although for current employees that are signing after the employee agreement has been signed, as a sign of your loyalty: "Give them something in return, such as bonuses or souped-up severance packages."

As this Q&A relates to staffing, it ought to lead you to think about your company. Were you personally working with a competitor in the past? How many of your company's staffers have previously worked with a competitor?

Of your company's former staffers, how many of them have moved on to working with a competitor, or started their related company? An employer ought to learn more about his or her employees. What seem to be their professional goals? What are their outside interests? Do they seem dissatisfied with any parts of their current position? While knowledge and skills themselves cannot be controlled, knowing who it is that's working for your company can only help prepare for loyalty and longevity within the company's culture.

Labels: Competition, Human Resources, Staffing

Written at 5:34 PM by CMO.

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