Insights into the forces shaping our industry.
GDPR and Indentured Servitude
In the past, I’ve often referenced the issues of employee non-compete contracts; basically, where an employer can effectively block the ability of a former employee to work for a period of time (regardless of the circumstances of their departure). In our business, we see these daily…and the breadth of the conditions of that restriction is disturbing; we’ve seen 5 year non-competes, down to a limited number of proscribed future employers. But the issue is a basic tenant of employee rights; does the act of resigning a position allow their former employer to restrict where they can go for future employment? In many states, the answer to that question is simply no…you can’t restrict a citizen from taking a new job; with very few exceptions.
In California; which has been the epicenter of a lot of employee rights legislation, there are new lawsuits pending that will determine if an employee can be tied to a non-solicitation clause. A non-solicitation clause can cover two distinctly different forms of solicitation:
1. Customer solicitation, whereby the departing employee is restricted in their ability to call on their existing customers for fear of them taking their former employer’s business away.
2. Employee solicitation, whereby the departing employee is restricted in soliciting their former peers, or other employees of their recently departed employer.
The current CA laws are testing case #2. In one of those cases, the departing employee was a recruiter in the company. So, the legal question is, can a recruiter be restricted to do their job (i.e. recruiting) when they join a new employer? The plaintiff’s logic is reasonable, how can you restrict my ability to do my job; after I’ve left your employ? CA has been the bellwether state for enacting legislation to protect workers’ rights. Non-competes have been outlawed in over 13 states, plus the number of states or municipalities that restrict the ability to ask for a person’s compensation prior to an offer has grown exponentially. These current cases may take a year or more to wend their way to the state supreme court, but the point is: the issue of personal control over your employment life is emerging far faster than anyone has imagined.
Take the General Data Protection Regulation (GDPR) as an example. GDPR is an EU-wide law that grants each individual citizen the right to control the data companies have accumulated. In the Europe Union, it is very stringent; with huge penalties for violating the regulations. As my European recruiter friends tell me; they must grant full access of their database to any candidate entry, plus offer the ability for that candidate to alter or delete their information. ‘Databases’ of candidates have changed dramatically.
In the US, CA has enacted laws that have paralleled GDPR regulations, called California Consumer Privacy Act or CCPA, whereby a person can contact any social media site and receive a report of all information that site has on them; plus report where that site may have sold their information. They can also demand that they delete all information they have. It’s all about the issue of citizen rights to privacy and freedom to work where they choose. The GDPR-style of laws will continue to expand; and rightfully so, as the increasing number of people who have been harmed by exposure of their information to companies with malicious intent. The public case of interference of our 2016 election is a stunning example of how easy it is to gain access to people’s private information and wage a campaign of misinformation to influence an important decision.
We have all learned from the social media experiment that selling access to our information; without our consent, is a fundamental invasion of privacy. We are being tracked every day; with sensors, cameras, keystroke analyses and keyword search information that has influenced our daily lives. Depending on who you are, your race, income, sex or age, where you live, your interests, etc…a Google search will deliver different results; tied to advertising dollars and Google’s misplaced, calculated assumption of what we want to learn from that search.
Companies certainly have rights to limit the behavior of their employees; within reasonable standards and during business hours. But the law is moving quickly to restrict these legacy contracts over where you can go and who you can contact, post-employment.
In our business, we’ve changed. We no longer ask a candidate how much money they make; and surprisingly, that’s liberating for us. We’ve never recruited ‘for money’ in our history, so taking the hard money issue away allows us to devote time to the qualification process; to ensure your investment is sound, regardless of ‘the money’.
I personally feel most of this legislation is based on just doing the right thing; enabling people to control their own lives, reducing the amount of data being collected can simply be hacked or sold for reasons of malice. Let’s practice basic principles: let’s be honest, open and ethical. Attracting and retaining ethical people will make every business more successful. Drafting contracts that focus more on what can go wrong, after they’ve left, is a terrible way to begin a relationship. If people want to leave your company; let ‘em go. If you really want to retain people…respect them.
Ted Konnerth, Egret Consulting Group’s founder and Chairman of the Board, recruits on a retained basis, helping leaders in the electrical and lighting industry identify their next C and V-level hire. Ted also manages Egret’s Consulting Services division, assisting clients with Organizational strategy, Channel strategy and Succession planning. To learn how Ted can help your company view his biography, check him out on LinkedIn or email him at firstname.lastname@example.org.