Mar 6, 20234 min read

The Unfair Impact of Non-Competes: How Non-Competes Hurt Our Eye Care Industry

The FTC accepts comments until March 20, 2023, for your stance on noncompetes, whether you are for eliminating non-competes or if you are for non-competes.

https://www.regulations.gov/docket/FTC-2023-0007/document (click comment)

Non-compete agreements are increasingly becoming the norm in business, but not under reasonable circumstances and what they are meant to do. These agreements' unfair and restrictive effects disproportionately impact minority populations, keeping them poor and preventing them from prospering. They are no longer created to protect trade secrets, client lists, or new business ideas but to keep the employee there longer, as most employees would not have the money to fight a lawsuit. Specifically, non-compete agreements suppress wages, limit job mobility, and impede career advancement, disproportionately affecting minority populations. By preventing employees from leaving for better opportunities and higher salaries, non-competes lock individuals into low-paying jobs, forcing them to stay undervalued and underpaid.

When an employee has learned the skills necessary to grow, they have to choose another field, drive further add time away from their family, or move their family away from their schools to work in a new field. Employers know employees cannot afford costly litigation (upwards of $60,000 or more), and attempting to fight litigation creates another disadvantage for the protected classes; draining funds, pushing people to bankruptcy, and preventing future growth, personally and professionally.

Alternatively, on the employer level, one of the significant challenges faced while searching for suitable candidates for employers is the existence of non-compete agreements. If an employer hires someone with such an agreement, it can lead to legal repercussions. This means that specific individuals cannot be hired, or some may not even apply, ultimately affecting patient care and the business. It's crucial to avoid such situations to ensure the smooth functioning of your organization.

Non-Compete Agreements Suppress Wages

Employers can use non-compete agreements to discourage workers from seeking higher-paying jobs. Non-competes are designed to restrict employees from working for similar companies, making finding work within the same industry challenging and sometimes impossible.

This is extremely troubling if the employee has focused their education toward and made their career in a particular industry or job. Now employers are blocking fair trade between individuals to promote a living where the employee invested time and money into education, trade, and training. Additionally, by prohibiting workers from leaving their current employers, non-compete agreements decrease competition overall, affecting the employees subject to them and those not under non-compete agreements. Opportunities overall are reduced, and workers who do leave often have to take lower-paid positions, so they are not in breach of their agreement.

Some states have created laws to restrict employers from enacting non-competes for employees earning lower wages, allowing these employees more opportunities to grow their careers and earning potential.

Non-Compete Agreements Limit Job Mobility and Impair Career Advancement

Non-compete agreements can limit job mobility, making it harder for workers to switch employers for better opportunities. Job mobility benefits workers and employers by allowing employees to seek better-paying jobs, receive advancement opportunities, and change their work environments if they no longer want to work in a specific position.

🤷‍♂️ Why should employees stay if their current employer does not provide those opportunities?

😒 Why would the employer want them to stay if the employee isn't happy?

🤷‍♀️ What if there are discriminatory practices, abusive relationships, a hostile work environment, or even sexual harassment?

The biggest issue we see when finding candidates for employers is that some people have non-competes. If you are an employer and hire someone with a non-compete, you will also get sued. So now, you cannot hire specific individuals, or certain individuals may not apply, and now patient care is affected, as is your business.

One concerning side-effect of non-competes is when it comes to medical professionals. If a practitioner or physician is subject to a non-compete agreement but cannot accept a position at a new company, patient care can suffer through a forced shortage of qualified candidates.

Moreover, most non-competes are unnecessary unless the employer protects something nobody else in the industry has. Think Coca-Cola's secret recipe! However, nowadays, you can create something similar to Coca-Cola, like Pepsi. There are very few things that the eye care industry has that would be worth signing a non-compete over.

Do Your Part

Non-competes are difficult to challenge. While some courts have taken a more permissive approach, most have considered challenges to non-competes as an attempt to enforce the contract. Do not feel that even if your non-compete would be considered invalid, you can breach it, as the only way to fight it is to spend thousands in state or federal court.

While you may not have a non-compete, we should think about others that do, and if we take the time to submit a comment on why it is irrelevant to have non-competes in this day and age to the Federal Trade Commission and allow our eye care family to grow.