One CEO Lays Out the Best Policy Argument Against Non-Competes

In a 1997 interview with Inc. Magazine, a Wisconsin-based CEO laid out the best reason for never having your employees sign a non-compete.

Although his position is perhaps a bit extreme, it certainly has a logic to it, and it is no less true today than it was back in 2007.

According to Ken Hendricks, founder and CEO of ABC Supply, in Beloit, Wis., non-competes are a losing proposition - even from the employer's side of things - because they foster mistrust: Hendricks opined that if the company is doing what it is supposed to do, i.e., paying well relative to the market for the job being performed, and providing a nice place to work, there is no reason to live in fear of employees leaving in droves and taking clients and/or other employees with them.  

In my view, here's the money quotation:

 "If you have to hold employees by using an agreement, you don't have much in the first place."  

 "Noncompetes are for people who are afraid of their own incompetence," says Hendricks.

Strong words that may be hard for some to hear. But does he have a point?

Perhaps.