5 Reasons We Don't Ask Employees to Sign a Non-Compete Clause

I’ve never asked a single employee to sign a non-compete clause (NCC) here at Cressey Sports Performance.

There was a time when NCC’s were typically reserved for company executives.  It looks as if this time has passed, as NCC’s appear to be the norm in the current world of fitness.  My attitude as it relates to NCC’s would qualify as “employee-friendly,” as I echo the thoughts shared by attorney Michele Grant in a recent Fast Company article:

"What started out as a scalpel for companies to protect their very valuable trade secrets and customer lists...has turned into a bludgeon that exploits all types of workers."

While I see value in NCC agreements in a number of business scenarios, employing fitness professionals here at CSP is not one of them.  Here are five reasons why we choose not to go this route:

1. Enforceability presents a problem

Can we specifically articulate exactly what is important about the trade secrets we are looking to protect here at CSP?  Nope.

We don’t have a leg to stand on if we’re going to make the argument that the lessons we teach our employees need to be fiercely protected one day, and then publish video tutorials featuring proper execution of those lessons the next. 

We’ve made a decision to help push the industry forward by frequently publishing material showcasing our knowledge and training philosophy.  Who are we kidding when trying to convince our employees that what they learn here qualifies as a trade secret after emailing these tips to the 90,000+ people on Eric’s newsletter? 

I routinely preach application of common sense to other fitness business owners, and common sense tells me that a judge would find our “valuable trade secrets” to be anything but secret.

2. There are challenges in staying up to date

Policies are constantly evolving.  At this very moment there is potential serious change on the horizon in Massachusetts.  If the suggested reform in our state happens to make it through, I would need to determine what constitutes a “low-wage worker,” slow down my current hiring protocols to allow for candidates to seek legal council in advance of signing a NCC, and ask myself if I’d really like to be on the hook for 50% of a former employee’s pay if they declared that they weren’t working because of the document we’ve made them sign.

At this moment, I can’t say that headaches such as these are worth my time.

3. Language must be rewritten as positions evolve

The roles and responsibilities of our employees are frequently shifting and evolving.  We may have initially hired Chris Howard to be a strength & conditioning coach at CSP, but he eventually became our company’s manual therapist, and also inherited the role of providing nutrition consultation services upon Brian St. Pierre’s departure to pursue a different career path (now the Director of Performance Nutrition at PN).  Had we asked Chris to sign a NCC back when he joined us in 2009, we would have had to revise and restructure the language each and every time we made a significant adjustment to his job description. 

In 2004, the trial court judge overseeing the case of Lycos, Inc. v. Jackson summarized the Material Change Doctrine Policy as such: “Each time an employee’s employment relationship with the employer changes materially such that they have entered into a new employment relationship, a new restrictive covenant must be signed.”

Again, I have to ask myself, are headaches such as these worth my time?

4. Sets the wrong tone for the initial hiring

I am of the opinion that the aggressive nature with which an employer negotiates and enforces NCC policies is typically a fairly accurate reflection of how they treat their employees throughout the term of employment.  At CSP we’re more concerned with creating a professional relationship built on trust than we are in battling through negotiations on the front end of the employer-employee agreement.

5. Semi-Private model makes bouncing undesirable

In the world of fitness, NCC’s are part of the competitive landscape in part to protect trade secrets, but also to protect client rosters.  Facility owners are often threatened by the thought of seeing an employee walk out the door and taking a considerable chunk of their clients with them.  This is an understandable concern.

The unique training and coaching model in place at CSP effectively downplays this risk.  Since clients are never positioned as “the property” of any individual coach, they’d be unlikely to feel inclined to follow a departing staff member.  As much as I believe in the individual skills of each of my coaches, the magic of the CSP experience is rooted in a training environment that emphasizes group supervision in a semi-private model.  Simply put, no single coach makes our gym special.  We are the sum of our collective parts. 

In Conclusion

I can absolutely support the use of NCC’s when the language is thoughtfully drawn up, the duration of the agreement is reasonable (a year or less), and the need to protect proprietary information and/or client rosters exists…I just don’t feel the need to integrate them in my own business model.

To each his own, right?