• The VET Recruiter
  • TVR Executive Search

Established in 1997

Your trusted partner for Animal Health and Veterinary Recruitment

Select Page
The Banning of Non-Compete Clauses for Animal Health and Veterinary Employers

In case you haven’t heard yet, non-compete clauses could be a thing of the past in a little more than a month’s time. And if that’s the case, then it could have an impact on employers, including those in the Animal Health industry and Veterinary profession.

How did this happen? Earlier this year, the Federal Trade Commission (FTC) published a proposed rule that, if it becomes final, would ban all non-compete agreements with limited exceptions. While at first glance, you might think this is a rather drastic proposal, it’s actually in line with other rules and regulations regarding the workforce that have been enacted during the past few years. These recent laws have:

  • Prohibited employers from asking candidates about their pay history.
  • Required employers to include a salary range in their job postings and online job advertisements.

The first thing to note about these recent laws is that they overwhelmingly favor job seekers and candidates. (And of course, banning non-compete clauses would also fall into that category.) The second thing to note is that these recent rules have been enacted at the state and local level first, meaning that not all employers in every state must follow them. Not yet, anyway.

The FTC’s proposed ban on non-compete clauses, though, would be different. It would be a nationwide ban, meaning that your organization would be affected by this rule, no matter where you conduct business in the United States.

While you are no doubt familiar with non-compete clauses, a short review is in order. According to Wikipedia, “a non-compete clause (often NCC), restrictive covenant, or covenant not to compete (CNC), is a clause under which one party (usually an employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually the employer).”

Non-compete clauses often have details and specifics attached to them. For example, a new employee might be asked to sign a non-compete agreement that requires them to abide by the terms and conditions of the agreement for up to one year following their departure from the organization. Typically, non-compete agreements afford the employer a layer of protection in two main ways:

  1. If a new employee signs a non-compete clause, then there is a greater chance they will stay with the employer for a longer length of time, resulting in a higher retention rate.
  2. Even if the employee does leave the organization at some point, they will be bound by the terms and conditions of the non-compete agreement.

This development is relevant to the Animal Health industry and Veterinary profession, especially the latter. That’s because non-compete clauses are not very popular with job seekers and candidates right now, since we’re in the midst of a red-hot candidates’ market. There is a severe shortage of veterinarians at the moment, which means there are plenty of new employment opportunities for the veterinarians who are interested in exploring those opportunities.

However, a problem arises when a job seeker or candidate attempts to explore another opportunity, and either they’re bound by the conditions of a non-compete clause they signed with their current employer or their potential new employer wants them to sign a new non-compete agreement. In some cases, this has caused a considerable amount of strife for both the candidate and the employer involved. Below are examples of this strife, which we at The VET Recruiter have witnessed during the past year:

  • Candidates who refuse to accept an offer from a potential new employer because said employer wants them to sign a non-compete agreement. Due to the nature of the job market, this is a “deal breaker” for some candidates. They’ll simply move on and explore an opportunity with another organization that does not want them to sign a non-compete clause.
  • Employers that are willing to spend money to defend their new employee in court when the employee’s previous employer sues them for breaching the conditions of the non-compete the candidate signed when joining that organization. This, perhaps more than anything else, underscores the severity of the veterinarian shortage in the job market and what employers are willing to do in order to hire them.

If this proposed rule becomes law, it may become more difficult for Veterinary organizations to retain their new employees, at least as far as non-compete clauses are able to help them do so. Instead, these organizations will have to rely on other strategies and techniques for retaining their veterinarians. However, the best way to retain employees has never been to rely on non-complete clauses. Instead, the best way to retain employees is to be an “employer of choice” and to treat your employees well, pay them well, and provide a great workplace experience for them.

In the meantime, what happens next?

The FTC published this proposed rule in the Federal Register on January 5, and public comments to the rule are due up to 60 days after it’s published. That means the deadline for public comments is March 6, and it also means the FTC can make a final decision at any time after that date. Once the FTC makes its decision, the proposed rule will become an actual rule 60 days later. And once that happens, employers will have up to 180 days to comply.

Below are some additional notes regarding the proposed nationwide ban of non-compete agreements:

  • Once enacted, it would apply to ALL non-compete agreements, meaning not only those that would have been theoretically signed in the future, but also those that already exist. For an existing non-compete clause, the employer will have 180 days to provide formal written notice of rescission to both existing and former employees bound by a non-compete clause.
  • This proposed rule would supersede all state laws, regulations, orders, and interpretations. The only way that a state law would supersede the FTC rule is if the law affords greater “protections” to current and past employees than the FTC rule does.
  • As for the exceptions to the rule? They’re not really exceptions, since they include non-compete clauses between the buyer and seller of a business.

As I mentioned, it is already exceedingly difficult to hire and retain veterinarians. If this proposed rule is eventually enacted, employers will have to further adjust to navigate the employment marketplace. Again, the best strategy has never been to ask employees to sign a non-compete agreement, but instead to be an “employer of choice” where people want to work. This will require employers to “up their game” to provide the best experience possible for their employees, so they want to stay rather than seek other employment opportunities.

(Note: Stacy Pursell is a Certified Personnel Consultant (CPC) and a Certified Employee Retention Specialist (CERS), one of a handful of executive recruiters and search consultants worldwide who holds the CERS designation. In addition, she is the only executive recruiter in the Animal Health industry and Veterinary profession to hold both of these certifications. Stacy is also a workplace/workforce expert, and her team of recruiters can work to help your organization hire the veterinarians or other Animal Health professionals that it needs to succeed and also help to retain those employees.)

Find out more about The VET Recruiter’s services for employers and also learn more about our recruiting process and how we can help you hire and retain more Animal Health professionals and veterinarians in 2023.

We help support careers in one of two ways: 1. By helping Animal Health and Veterinary professionals to find the right opportunity when the time is right, and 2. By helping to recruit top talent for the critical needs of Animal Health and Veterinary organizations. If this is something that you would like to explore further, please send an email to stacy@thevetrecruiter.com.

Learn More About This Hot Candidate

"*" indicates required fields