….good for joseph

I have known Joseph for more than 20 years. He is a software sales guy and, looking back, I placed him twice in the 20 year period. Being in the software business and being 63 years old, he’s had a really hard time finding a job in software. Unfortunately (nobody admits this) the hiring authorities mostly choose younger kids. But I got to give Joseph credit for the years of determination. There is no doubt that he has been a great sales guy for some really great companies. But the past few years have been tough.

So, Joseph calls me up a week or two ago and says, “Tony, a number of years ago, I very successfully sold staff augmentation services. I was really good at it. Call a number of those people and tell them all go to work for a $45,000 or $50,000 base salary plus commission. I know it’ll probably be a far cry from the $220,000 earnings that I’ve had before in software, but I need a job and over time I can take that kind of money selling IT staffing.”

So, I went to work. I called 10 IT staffing firms that I’ve done business with before. I was pretty blunt with them about the deal Joseph was willing to make with them. It’s really interesting, that profession is predominantly represented by millennial’s with a few gen Y’s. After nine rather polite “no’s” one outfit thought it might be a great idea.

Joseph’s energy, determination, passion and commitment came through. The company hired him at $70,000 salary plus commission. They are thrilled and I guarantee you Joseph is going to be a tremendous addition to their sales organization.

I was blessed to have made four placements this week. One of them, I had been working on for two months which had died and come back life at least three different times. But none of them were as gratifying as Joseph’s getting that job. In fact I don’t think any of the placements I’ve made in the last number of months have been as gratifying as Joseph’s success.

There are literally hundreds of software and high tech sales guys who I have literally “grown up” with over the years. The majority of them are between Joseph’s age and older. The vast majority of them are complaining all the time about how their age is “against” them. It doesn’t do one damn bit a good and it gets them absolutely nowhere. There’s a great deal of them that have been unemployed for more than a year, some more than two years.

Joseph should make us all proud. He’s a really good guy. He makes a great presentation of himself, is personable and people like buying from him. I have to admit that it was his idea for me to call the staffing firms. It did take 10 of them before I found one that would listen. They got a great employee who will make them a lot of money.

If everyone Joseph’s age who can’t find a job thinking it’s because of their age, took Joseph’s attitude and approach, I wouldn’t get the complaints I do.

Good job Joseph!

 

 

…..Why so many people are out of work… and don’t really want to

There are 325 million people in the United States. 95 million of them are not in the labor force. 88 million of these people don’t want a job…38 million of these say they are retired, 16 million are ill or disabled, 16 million say they are students, 18 million have simply dropped out of the work force. The number of officially unemployed people who say they’re actually looking for a job is 7.1 million. Consider:

  • There are more welfare recipients and full-time workers in the United States
  • One in seven people in the United States receive food stamps
  • One in 20 Americans receive disability
  • 12% of all prime aged men (25 years old to 54 years old) are not looking for a job
  • Between 2000 and late 2007 per capita GDP growth averaged less than 1.5% per year
  • The adult work rate in America is barely above at its lowest level in 30 years
  • For every 1 male between the ages of 25 and 54 working there are 3 that are not

And some of the most prominent reasons for this malaise:

Entitlements pay more than the job. Between unemployment insurance, disability insurance and food stamps, it’s more economical to collect entitlements than it is to find a job. One study reported that a family of four, collecting all the benefits for which they are entitled could earn his much is $65,000 per annum. There are more people participating in at least one of the 15 food programs offered by the Department of Agriculture and there are fully employed in the United States.

The affordable care act has a perverse twist affecting the labor market. Means tested subsidies phase out as incomes rise. Some people will choose to stay poor or accept a lesser job and they might be capable of or get out of the workforce completely to keep insurance. Changes to the affordable care act that President Trump has recently made may, thankfully, change this.

There’s also an “attitude” of entitlement that there “ought to be a job for anyone who wants one and they are to be easy to get.” This attitude causes people to think that the job should come to them. Most people think that “looking for a job” is simply emailing resumes. Most people don’t really work very hard at getting a job.

People don’t want to take a pay cut. Salaries have still never reached levels that they were in 2007 and 2008. Most people have an idea that their earnings should increase every year. Even after long stints of unemployment these people will claim, “I really don’t want to take a step back moneywise.” Once they pass up one or two opportunities, they rarely come to their senses. Instead of taking any good salary they can get a think, “well I passed up to opportunities with less money than I was making so I should stick to my guns and wait for something better.” And something better doesn’t come along for even years.

People don’t like a company’s reputation. Many surveys find that Americans would not take a job with a company that had a bad reputation even if they were unemployed. This is crazy! These same people state that they would change their mind if they receive a 50% plus increase in their previous pay. (It appears that a bad reputation is relative to the money that people are getting paid…go figure!)

I’m not sure I really know what a “bad reputation” means. Unless a firm operates in illegal or immoral business job with the company who has less than a stellar “reputation” is better than no job. And some of these reputations are interpreted from comments made on Glassdoor. It’s despicable that people would believe what might be written anonymously. I don’t have a problem with anything anybody might say about any company as long as they put their name on it. But for people to make decisions about anonymous comments is absurd.

Those in motion tend to stay in motion. Those at rest tend to stay at rest. The longer people go out of work the easier it is to stay out of work. It’s just that simple. This is one of the reasons that taking “massive action” to get a job is so important.

Most people submit resumes online and when they don’t get an answer they give up. These people don’t really know what to do to get a job. The odds of getting a job by sending a resume are 1 in 375 to 400. When you ask people what they’re doing to get a job beyond sending a resume their description is very sketchy. The key is to develop a systematic approach to finding a job. It takes a lot of work! A whole lot of work!

Even when their resume might be perfect for the job, the people who receive it, most of the time, the human resources department is understaffed and overwhelmed. There are 200 resumes submitted for every job and I venture to guess that less than half of them even get scanned let alone read.

The cost of childcare is staggering. In some states cost of childcare is the greatest expense that a family experiences, outweighing food and housing. The largest demographic hit is single mothers. The national Institute of health says that for low income single mothers with young children, child care challenges can be is significant barrier to employment.

The commute is too long. In a recent poll 75% of 584 people said they turned down a job because it was “too long of a commute.”

Maintaining their place in the benefits system is a full-time job. Government benefit programs have strict rules about those receiving benefits. Many people spend the majority of their time staying within those parameters. They know that if the rules are broken they could lose their aid. Government offices are packed every day all day long in this country. The Department of Labor, the Social Security Administration, admission offices for public hospitals in most programs like this have hours upon hours of wait time. The required appointments and the filling out of paperwork, qualifying and requalifying for unemployment, Social Security insurance, disability, food assistance programs are absolutely daunting. It’s very hard to look for a job when a person is faced with these issues. There’s really not enough time in the day.

People out of work for a long period of time feel stigmatized. If a candidate has been out of work for six months or more, they feel marginalized. The truth is, they are. Employers will often pass any candidate up who has been out of work for a long period of time. There are just too many other candidates to choose from. A candidate out of work that long appears to be a risk. And that is just one less risk they might have to deal with in considering another candidate who appears to be either employed or recently unemployed.

 

There are very few simple answers to all of the reasons that so many people are out of work. Repealing or even streamlining entitlements would be a great start. Teaching people all of the activities that it takes to find a job would be another step in the right direction. Holding people accountable for taking massive action with those activities would be another valuable tool. Many of these solutions will be difficult and take a long time to institute.

….’cultural fit’

I hear it once a day…a euphemism for age, gender, race, faith, ethnicity…anything you can think of. Few folks will be absolutely open about it. They kind of mumble the words in an uncomfortable, low toned, embarrassing manner, with their revealing guilt. Sometimes, rarely, a good business reason underlies the discrimination. Thirty or so years ago, I remember the owner of a trucking company telling me he wanted to hire an overweight, older lady to do the front office scheduling and bookkeeping. He insisted that he didn’t want the drivers hanging around the front office ogling and flirting with the woman he hired. It wasn’t illegal to discriminate this way back then. Although it still might have been wrong, I totally understand his point.

I really understand the rationale behind this issue, though I disagree. A tribal mentality will always exist. Let’s face it, an employee with growing children probably wants to be home for dinner with the family in the evening rather than endless happy hours with younger peers and ‘clients’ with nothing better to do. And if that is a part of their business, it just may not fit some folks. It often, though, may never cross the mind of managers that happy hours may not be the only way of being effective.

Young, inexperienced managers often shy away from hiring  very experienced, older employees for fear of being treated like a ‘kid’ instead of a boss. Older managers claim they don’t want to mess with ‘raising’ kids by putting up with the strains and distractions of youth…romances, social life, that is more important than work, etc. They say, “I’ve already raised my own children, don’t want to raise any again.” Both ends of the spectrum aren’t universal.

This ‘cultural fit’ issue is just one variable some employers refuse to deal with. I get it. Business is rough enough without having to worry about an issue that might become a problem. And if companies only hire the ‘same’ kind of folks, they’ll never know what else might work.

As a job seeker, it is useless to rail against this bias. It may not be right, but it ain’t gonna change. Quit expending energy on it. There are lots of wrong things in the world. As the need for good employees increases, these biases will decrease because of demand.

I’ve experienced European firms as well as East Indian firms who hire Americans simply because they need them in order to do business in America but I can tell in speaking with them that they have a disdain as well as a condescending attitude towards Americans and American businesses. They often look down their noses at us, implying that we really don’t know what we’re doing. Maybe it’s a defense mechanism. I don’t know.

And then there are some cultures like my heritage, Middle Eastern, where it is simply accepted and assumed that everybody lies. Well, a milder way to put it is that they don’t always tell the truth or all the truth. That doesn’t mean that all Middle Eastern folks lie. Most of us don’t. It just means that bending the truth is a lot more accepted in the Middle East than in America. I know one president of a company who is East Indian who won’t do business with most East Indian companies because he says the way they are taught to do business in India isn’t the way he chooses to operate. Bending the truth, he says, or telling people that they will do something they don’t really intend to do is accepted in that culture.

The truth is that lots of people at any age act crazy. Lots of folks of different races, genders and ethnic backgrounds see the world differently than you. Some outright lie and some outright don’t like the rest of us.

Some of these issues are perceptions and some are total misperceptions. I placed a 64-year-old sales guy with a woman-owned sales organization where the 14 women who comprise the organization averaged 32 years old. He’s doing great and they all laugh about the perspective that he brings. (I doubt, though, it would be easy to get used to “cultural” lying.)

We’d all probably be a little better off if we’d simply forget employees fitting into the “culture” of our company. Just be aware, though, that as a job candidate you may very well run into cultural bias. Complaining about it probably won’t do you one bit of good. You are still not likely to be hired. Be aware, however, that you probably have some of those cultural biases yourself.

 

 

 

…TMI

It happened twice this week, and happens all the time. Candidates are asked a reasonable question and give not only Too Much Information, but way too much information and it ends up costing them the job. We had a well-qualified candidate for senior-level inside sales manager’s job. She made it past the first interview and when she went to the second interview for some reason or another she felt compelled to explain to the female hiring manager why she wore a wig. It was a very expensive wig and unless you look closely you couldn’t even see that she wore one. She went on and on, according to the hiring authority, for five or 10 minutes about the condition of her hair. It had absolutely nothing to do with the job… nada! On top of thinking that the conversation got weird, the hiring authority totally lost interest in the candidate. And what’s worse, the candidate didn’t even detect it.

The second situation had to do with a very well-qualified V.P. This guy is in his late 40’s and has 20 years of solid experience and you think you would know better. Somewhere in the conversation with the CEO of one of our clients, he started talking about all of the problems he was having with his 16-year-old. Now most of us who have raised kids know parents always have problems with a 16-year-old, especially a male 16-year-old. For some crazy reason our candidate felt so relaxed with the CEO, he told the CEO about his kid’s problems at school, his kid’s challenge with hanging around the wrong kinds of other kids and, can you believe this, his kid’s drug problem. End of interview! Although the CEO had a tremendous amount of empathy for the candidate’s situation he didn’t feel comfortable at all hiring someone who might be so distracted by his 16-year-old that he might not travel or work like he should.

Some years back, we had a very accomplished female candidate. She had recently gone through a rather ugly divorce and didn’t mind sharing her woes over the divorce with prospective employers. We warned her not to do this under any circumstances. Many people however in situations like that can’t help themselves. She made it past three interviews with one of our clients and was a finalist. In fact, we were told it was hers to lose. In the final interview with the executive VP she ended up telling her personal story. After the interview she told us that even though she had gone into her personal story more than she would like, the hiring VP totally understood her situation. The executive VP told our candidate that she had recently gone through the same kind of ugly divorce and they spent 20 minutes commiserating. Our candidate knew that, this time, talking about her ugly divorce only helped her, because the executive VP really understood and empathized with her because he executive VP had just gone through the same kind of ordeal. Unfortunately, she was totally wrong. The Executive Vice President wasn’t going to hire her because, according to the EVP, she knew what a basket case someone is when they go through that kind of thing and since it had just happened to her she knew, from experience, that a person going through that ordeal wouldn’t be focused for at least a year.

Here’s the lesson:Don’t give TOO MUCH INFORMATION !!!It will work against you

…the (almost) $155,000 mistake

i got an interview for one of my candidates that i have known for a number of years…he is very picky and the kind of job he needs is very hard to find..

when i told him about the interiew, he started giving me this stuff about..”well, i know them…i wouldn’t work there…they know me…i don’t want to go…i don’t think they can afford me..it doesn’t sound right” blah..blah..blah…

i threatened him that if he didn’t go, i wouldn’t get him any more interviews…i shared with him that he is a pain in the butt and that he needs to go on any interview he can, because he is hard to place and kind of people that would hire him are very hard to find…

he went…

he starts work for these guys monday…$155,000 salary plus commission that will put him at $300,000 the first year… a $20,000 HIGHER base than he was making..

LESSON: ..go on every interview you can get…you really don’t know “them” like you think you do…what a job “sounds” like has nothing to do with reality… don’t make a $155,000 mistake

…optimism bias

This is the psychological term and condition that causes a person to believe that they are at less of a risk of experiencing a bad outcome than most, and more likely to believe that they are luckier than most to have a positive outcome. This bias shows up in all kinds of issues. For instance, most smokers believe they are a lot less likely to get cancer from smoking than other smokers. The vast majority of drivers think that they are in the top 20% of quality drivers. Most people think they’re less likely to be crime victims than they really are.

This is relevant to job seekers because 90%  of the job seekers I have interviewed since 1973…over 26,000 of them…and 60% of them were employed…all thought it was gonna be a lot easier to find a job than it was and is… and all began their job search thinking and saying, “This is gonna be easy…never had a problem before…everyone needs a great employee like me…look at all of the promotions I have had…look how great my track record has been…my neighbor (cousin, brother, etc.) got a job real easily, and he is a jerk, so this will be easy…” then they often follow it up with, “…so I took a few weeks…months…off  ’cause I hadn’t had a real vacation in a while…”

Then they start looking for a job or doing some minor efforts toward that and find out that the market is very difficult, more difficult than they even imagined. Reality sets in and they realized that they should have started a full-court press in looking for a job two or three months earlier.

Another form of this optimism bias has to do with people’s attitude towards interviewing. I hear   this a number of times every week, “Tony, just get me in front of them, I’ll nail the interview… I’m really good at it.” Anytime a candidate tells me that, I’m worried. Interviewing is a difficult thing to do. Very few people do it well naturally without a lot of practice. After a few big time rejections, humility and reality normally set in.

Optimism bias in the job search can manifest itself in many other ways and all of them are treacherous to the job seeker. The best way to avoid optimism bias is to approach looking for a job with absolutely no expectations, a slight bit of paranoia and the realization that it is going to be hard and the job seeker has to start working at their job search immediately. I’ve seen six recessions come and go and I assure you the job market is never quite the same every time. A job seeker can’t confuse the last time he or she changed jobs with today’s market.

Rather than being “optimistic,” I suggest a job seeker should be “hopeful” and then work like hell by working a systematic process like I teach.

….making a job offer…for employers

(This is an excerpt from one of our books 100,000 Successful Hires written, primarily for employers. But if you’re a job seeker, it certainly doesn’t hurt to know the best way for a job offer to be made.)

You would think that the event of making a job offer to a prospective candidate would be an easy, logical one. In fact, it might be a surprise to even think that we would have to address the whole idea. Wrong! Fact is that the actual process of making an offer, once a final candidate has been identified, can be one of the strangest, goofiest parts of the hiring process. One would think it should be the simplest part of the process, but it can mess up a smooth running process very easily.

The final step in the hiring process is making an offer. It can be traumatic for both candidate and employer. This is the time for people to make commitments. Up to this point, every interaction between candidate and employer is speculative. There is minimal risk on each person’s part. True, there has been a lot of effort on the part of both candidate and employer to interview each other, but there’s no commitment, therefore no risk, until an offer is made.

There is a final twinge of fear on the part of the employer and candidate when making an offer. Employers often become alarmingly fearful that their offer will be rejected, that the candidate they’ve courted for weeks and who was interviewed by everyone they could think of will refuse their offer. The candidate who has been trying to get an offer, but also evaluating as best he or she can the firm they are interviewing with, gets scared. They fear that they won’t get an offer and, if they do, they’re anxious about what it might be. This step in the process is difficult for everyone.

The offer step in the hiring process should be a simple and natural progression of the interviewing process, yet it gets confusing when people either lose sight of its importance or overreact to it. In fact, if the interviewing process is done correctly, the offer step should be easy.

The most successful hiring authorities have a pre-offer conversation with a candidate. This can be a face-to-face meeting or a telephone conversation. The hiring authority explains to the candidate that he or she would like to discuss what an offer would look like and also any details about the job that haven’t been discussed in the interviewing process.

If the hiring authority hasn’t done it already throughout the interviewing process, this is the time that he or she should be selling the candidate on the job and the opportunity. This conversation is the candidate’s opportunity to ask any questions he or she might have, but it also provides an opportunity to the hiring authority to find out the answers to any questions he or she may not have answered. It should be a friendly, calm, and open conversation.

In this conversation, the best hiring authorities get a real good indication as to whether or not the candidate will accept the job. In fact, the best hiring authorities actually qualify the candidate in this conversation. They discuss every aspect of the job offer. They answer all the candidate’s questions. Then, they simply ask the hard question of the candidate, “I’m ready to get together for a formal meeting to offer you the job. Can you see any reason that you wouldn’t accept it?”
If for some reason the candidate hesitates or gives noncommittal answers like “Well, when I see the offer in writing, I’ll know better,” or “I’d have to think about it,” or anything that isn’t a positive like “I would accept it,” then the best hiring authorities may rethink making the offer. If they get these kinds of answers, they simply ask a candidate what they’re thinking or what might stand in the way in order to find out why they are hesitant. It never hurts to be blunt and ask, “Why are you hesitating? I don’t want to make an offer unless I know it’s going to be accepted.”
It’s hard to give a blanket strategy for all things that can come up at this point of the process. The best hiring authorities are prepared for just about anything and they always have the salvation of backup candidates. They always have several other people in the queue in case their #1 candidate falters.
The formal offer

If the conversation goes well, the best hiring authorities meet with candidates as soon as possible. They know that any candidate they might want will be wanted by others. Most importantly, the longer they put off this meeting after the above conversation the more indecisive they appear.
We can’t tell you the number of opportunities to hire a good candidate that have been lost because the hiring authority felt the job offer was simply a formality and the candidate was going to accept the job and postpone the formal meeting because regular business got in the way. They assumed a done deal, prolonged the time to formally meet, made it appear that the meeting wasn’t all that important, and lost the candidate. (We once had a hiring authority who postponed the offer meeting for two weeks so she could go on vacation. Lots of love, huh?)

The best hiring authorities have a formal offer written for the candidate. When they meet to discuss the offer in detail, they assume the candidate is going to have lots of questions and have prepared the answers to the questions the candidate had in the pre-offer phone call. The best hiring authorities take as much time in this meeting as they need to and are patient with any questions or discussions the candidate may have. They realize how important this meeting is to both of them.

Discussing a formal offer over the phone is nowhere near as effective as meeting face-to-face. It simply doesn’t have the same emotional camaraderie and the “we care about you” feeling. If a company’s HR department has to issue the offer letter, the best hiring authorities will still meet with the candidate and discuss the offer in detail. The best hiring authorities do not let anyone in the company discuss the offer with the candidate except themselves. They leave nothing to chance.

If everything has been done correctly 75 percent of the time, the best hiring authorities will get the candidate to execute an offer letter and set a start date during this meeting. However, if the candidate asks, “When do I need to let you know?” the best hiring authorities will explain to a candidate that they need to hear from them within 24 hours about their decision. Maybe under extenuating circumstances they may offer a little more time, such as if the candidate is traveling and needs to discuss it with their spouse, but 99 percent of the time the best hiring authorities tell the candidate they need to know within one day.

The best hiring authorities already have a feel for what the candidate is going to do. The best hiring authorities know that a decisive candidate is going to be able to decide quickly. Anything beyond 24 hours usually indicates that the candidate is going to use the offer to leverage another one, and the best hiring authorities don’t seem to tolerate much of this.
If the candidate insists on more than 24-hours, the best hiring authorities explain that they can’t do that, that they have other candidates they are going to pursue. They reinterate that they need to know within 24 hours. If a candidate cannot do that, the best hiring authorities explain to the candidate that they will therefore pursue the next candidate. End of story! The candidate is either in or out. It’s that simple.

By the way, if the formal offer is written after this meeting, the best hiring authorities review it to be sure that it’s consistent with what was discussed. 15 percent of the time, when offer letters are sent after a formal offer discussion, especially when they are written by the HR department in some far-off city, they aren’t the same as what was discussed in the offer meeting. It’s a quick and easy way to lose an excellent candidate

The best hiring authorities set a start date as soon as possible. They know that the further out the start date is from when the offer is accepted, the more things can happen that are adverse to the situation.

The best hiring authorities never assume anything in the offer meetings. If the candidate accepts the job and sets the start date, they simply prepare themselves for that. If the candidate, for some reason, turns the job down or claims that they can’t decide within the 24-hour time limit, the best hiring authorities are gracious and unemotional about it. Getting upset or angry with a candidate who turns the job down is unwise. The best hiring authorities know that they may try to recruit a candidate again somewhere down the line. They know that it pays to always be nice.

No matter what level of position, from the CEO on down, 15 percent of the time a candidate who has accepted an offer is going to call and renege. Sometimes they will do it with grace and style long before the start date. Unfortunately, they sometimes just plain don’t show up with no notice at all. (We agree that’s totally pathetic!)

The best hiring authorities know this kind of thing might happen. One of the ways they prepare themselves for this possibility is to explain to the #2 and maybe the #3 candidates, “We’ve offered the position to another candidate and it’s been accepted. It was a very close decision and you were certainly an extremely good candidate. We did what we thought was best for our organization. The new hire is supposed to start on (date). We expect everything to go well, but if, for some reason, something happens that he or she does not start, I’d like to give you a call. If we might still be a consideration for you, we can pick up the conversation again, if we need to.”

The best hiring authorities hope they won’t need this contingency plan. But just in case, they’ve prepared themselves for it. The #2 and #3 candidates may not be available should this happen, but at least a hiring authority may not have to start all over if it does. We can’t tell you the number of phenomenally successful employees we’ve placed who got hired this way.

….non-compete agreements…an employer perspective..part I

(Over the next few weeks, we’re going to discuss non-compete agreements from a hiring authority perspective as they relate to the interviewing and hiring process).

So, you think you’ve got a non-compete agreement with all of your employees and no one would dare leave your organization and compete with you by calling on your customers or taking your “trade secrets.” Babich & Associates, as a recruiting firm, gets asked about this issue at least two times a week. We are not attorneys (… that’s why we’re asking Russ Brown to help us with this issue), but we are asked by, not only candidates, but also our clients about non-competes. It’s pretty clear by the frequency of this question that non-compete issues are important ones in the hiring and employment process. It is also clear that most hiring authorities think they know about non-compete agreements. Most don’t!

It’s Russ’ job to advise you about specific details of enforceable non-compete agreements with employees. He can be reached at 214-613-3350 or russ@brownfoxlaw.com. We are often asked, however, about a candidate’s non-compete agreement by our clients as well as candidates asking us about their non-compete in seeking a new job. Our discussion is going to center around the issues we see in the interviewing and hiring process regarding non-competes and ask for Russ’ comment and opinion about these issues. Russ can discuss non-compete specifics for the standard fee of $300 per hour. (Trust me, he is worth every penny of it!)

A non-compete agreement typically restrains employees from engaging in a competing business with his or her former employer, in a certain geographical area, and for a limited period of time following the termination of the employment relationship.

Here are some of the major issues we hear from our clients about non-competes during the interviewing and hiring process:

Can your candidate bring us customers? This question is usually asked of sales candidates, customer service or customer facing candidates. Our clients would like a candidate to be able to bring his or her contacts who they are presently calling on to their new employer. It’s usually followed by the comment, “Don’t worry if they have a non-compete… they don’t mean anything in Texas.” Ironically, many hiring authorities will claim they have a non-compete also.

Any candidate with any brains would know that if the new hiring authority was asking them to “steal for them” then somewhere along the line, the employee’s new company would just as easily “steal from them.”

The rationale behind this thinking on the part of a prospective employer is, “Well, everybody knows everybody’s customers. We all have the same customers, so they’re not really any trade secrets.” Don’t fall into this trap. A company’s password protected, customer database is probably going to be construed as a “trade secret.”

Asking a candidate to bring a printed customer database from his present or previous employer once he or she is hired is equally insane. It is not the candidate’s property.

Russ’ comment:

“Anytime an employee seeks to introduce her customer “Rolodex” from a prior employer to a new employer, there will be an opportunity for legal fireworks. Protection of this sensitive information is a huge issue for companies. Generally speaking, never ask a candidate to use a prior employer’s confidential information. Instead, I recommend to my corporate clients to be proactive and first obtain assurances from a candidate that she is not working under any form of restrictive covenants (e.g., restrictions like a non-compete), or if she is, precisely determine the limitations on future employment. The new employer should obtain this assurance in writing either in the form of a non-disclosure agreement or various protective clauses in her new employment agreement. These assurances should greatly help to protect the company from unknowingly using a prior employer’s client lists and trade secrets and remind the new employee that the company will expect her to protect its confidential information in the future. Key clauses include written assurances from the candidate that (a) she is not under any prior restrictive covenants and/or will honor prior restrictive covenants, (b) she will not improperly use any third-party’s (e.g., your company’s client) trade secrets or confidential information, and most importantly, (c) she will not use your trade secrets and confidential information beyond the ordinary course and scope of her employment with you.

Beyond client lists, the new employer should ensure it does not use any other trade secrets supplied by the new employee. Some examples:

Budgets, business plans, cost and price information, blueprints, analytical data, advertising terms/conditions, forecasts, formulas, profit/loss statements, proprietary technology, marketing/sales promotion information, vendor/supply lists, visitor tracking data, etc.

An employer who takes these issues seriously on the front end will be much better equipped to defend against claims by the former employer in the future.”

Well, the candidate had those people as customers before he went to his present employer… right? That may be true, but his or her present employer will not see it that way. Their attitude will be, “Once a customer is in our database… he is our customer.” And since that customer is a “legitimate business interest,” they can’t be taken from us. Often, we have candidates who, when they went to work for their present employer, excluded from their non-compete agreement customers they already had. Expect that a candidate might do the same with you.

Russ’ comment:

“ The ‘ownership’ or origination of customers can be a fact intensive issue in which the lawyers duke it out through written discovery, depositions, emergency temporary restraining order hearings, injunction hearings, and trial, if necessary. As we previously suggested, it’s wise to establish a clear understanding on the front end and at the outset of employment and do so in writing and seek legal advice regarding how to handle next steps.”

Have the candidate bring a copy of their present non-compete agreement with them during the interview process. Now, we’re getting somewhere. This is a great idea. Many non-compete agreements are written in other states. Some of the ones we’ve seen over the years would be terribly difficult to enforce (i.e. the defined geographical area is “the world”). Don’t take the candidate’s opinion of how enforceable or valid his or her non-compete agreement is. Their attitude towards their present non-compete will be the same attitude they will have toward yours. Regardless of their attitude, you be the judge of the candidate’s non-compete agreement and how it could impact your business should you hire the candidate.

We’ve had some clients over the years who have agreed to take on the legal fees associated with defending a candidate’s non-compete if the candidate was sued by their previous employer. Something like that is a business decision and may be worth it. Most of us have enough headaches and don’t need a “self-inflicted” one like this, but it might be worth considering.

Beware of a candidate who says he or she does not have a non-compete agreement or can’t find the one they signed when they were employed by their present company. Some candidates… amazing number of even very professional ones… truly don’t know if they have a non-compete agreement or not. Both situations should be big red flags.

Russ’ comment:

“Tony, you’re exactly right about new candidates’ confusion regarding prior agreements.” At the time of hire, employees typically are excited and taking in a lot of information. It’s not uncommon for an employee to sign basic “new hire” documents with little or no review. I’ve encountered instances where written non-competition agreements are in place, but the employees do not recall signing an employment agreement, non-disclosure agreement, or non-compete agreement.

I also would never advise a client to trust a new employee’s assurances regarding a prior agreement. If possible, a wise employer will, at a minimum, review the agreement in-house. The best option is for the employer’s counsel to review the prior agreement.

It is important to note that there is a vast difference between various states’ approaches to restrictive covenants. In Texas, where I practice, properly drafted, reasonable restrictive covenants, including non-compete agreements, are enforceable and employers serious about protecting their workforce and trade secrets will aggressively seek enforcement.”

Legal Disclaimer:
*No commentary by Russ Brown in this article is to be construed as legal advice or creating an attorney-client relationship. If you have specific questions, contact an experienced employment attorney to discuss your legal issues.

About Russ Brown:

*Russ Brown is a Dallas-based employment attorney and the Managing Partner of Brown Fox Kizzia & Johnson PLLC. Russ has been honored as one of the Best Lawyers in Dallas under 40 years old by D Magazine and as a Rising Star by Texas Monthly and Super Lawyers seven times. Learn more about Russ Alland Brown Fox by visiting www.brownfoxlaw.com.

Topics for the next few weeks: honoring the non-compete and still being competitive, lawsuits over the non-compete, history of the candidate’s present employer regarding non-compete agreements, and postemployment agreements with previous employer.

…your noncompete agreement

At least three or four times a week our candidates inform us that their non-compete agreement “doesn’t mean anything in Texas” or “It’s not enforceable in Texas”, etc. I have no idea where people come up with these ideas, but they are absolutely wrong. Non-compete agreements are enforceable in Texas (and in most states) and don’t let anybody ever kid you and please don’t believe them. I’m going to address some of the things that we mostly run into regarding non-compete agreements. Realize, though that the best legal advice about non-compete agreements should come from quality attorneys. Two of the most prominent labor attorneys in the city happen to be guys that have contributed to our radio program, The Job Search Solution ,every Monday through Friday from 8 PM to 8:30 PM on 620 AM, KXEB Dallas. Stephen Key can be reached through his firm, Key Harrington and Barnes at 214-615-7925. Russ Brown of the law firm Brown Fox Law, can be reached at 214-613-3350. Every Friday evening we interview Stephen Key about all kinds of legal issues in employment and we probably get more questions about non-compete agreements than anything else. I am personally NOT giving legal advice here. You’ll have to get that from these guys. But I am going to address some of the common issues we run into as recruiters.
The first one I’ve mentioned above and it’s that the candidate doesn’t think his or her non-compete agreement will be enforceable. It may or may not be enforceable, but the idea that they don’t mean anything in the state of Texas is totally nuts. If you are an employee and you have a non-compete agreement you’d best get the advice of an attorney (the guys above) before you whimsically think that it won’t matter. We have placed candidates who were never asked about their non-compete agreement by the hiring authority, never mentioned in the interview about their non-compete and then after they show up for work, both they and their new employer get a threatening letter from their previous companies attorneys. Often, their attitude has been, “It doesn’t mean anything,” but their new employer has enough problems and doesn’t want to deal with any more hassles. More often than not, the new employee will get terminated right then.
Thirty five or forty percent of the time when I ask a candidate about their non-compete agreement, I’m told, “I don’t know if I have one or not.” At this comment I seriously wonder if I ought to be working with this candidate at all. If he or she isn’t bright enough to know whether or not they have a non-compete, it’s questionable as to whether they are going to be a good performer or not. Having said that, though, I’m amazed at the number of quality candidates who truly don’t know if they have a non-compete agreement and, what’s even more hideous, or stupid, is that they don’t know where their copy of it is. In fact, what brought this whole idea up for this topic was a candidate telling me this week that he knew he had a non-compete that he was absolutely certain that his company did not give it to him. I assured him that if they had gone to trouble to require a non-compete agreement upon hiring him, they were smart enough to be sure that they gave him a copy of it.

The guy went home to look through his employment papers that he thought he could find somewhere. He called me and said that he had looked around and couldn’t find any non-compete agreement and, he literally asked me how he would get one. (I can’t make this stuff up.) After a few minutes of discussion he came to the conclusion that the only way he was going to find a copy of the agreement he signed was to ask the human resources department for a copy of it. It didn’t take more than a moment for him to come to the conclusion that if he asked the HR department for a copy of his non-compete agreement it would certainly raise a big red flag. I suggested that he find a recently departed associate, and ask one of them for a copy of theirs, because usually the agreements are the same for most firms. He suggested that he could ask one of his close friends at the company and I reminded him that that is still a risky thing to do. We left it that he is going to think about how to find a copy of what he signed.
Simply put, a non-compete agreement typically restrains employees from engaging in a competing business with his or her former employer, in a certain geographical area and for a limited period of time following the termination of the employment relationship. Where the issues of non-competes become contentious is the interpretation of who a competitor really is, the reasonableness of a geographical area and the reasonableness of the period of time. I have personally read some non-compete agreements that communicate competitors to be just about anybody in any kind of business, geographical restrictions to be the whole world and time restrictions as being infinity, or close to it. When legal battles occur, they usually occur over these issues.

Knowing your company’s history of enforcing or trying to enforce non-compete agreements is important. I’ve had candidates tell me things like, “Well they haven’t ever gone after anybody over non-compete, so they won’t come after me.” According to Russ Brown, that is a fallacy. There might be a big difference in the impact of a CFO going to work for a competitor and that of a low level inside customer service rep. Just because your present company doesn’t pursue non-compete agreements with some parting employees doesn’t mean that they would not pursue one with you.

Some companies we do business with are extremely aggressive about enforcing their non-compete agreements. These organizations aggressively threat, and if need be, sue every ex-employee that goes to one of their competitors with the full intent of going to court, keeping the candidate from working and even seeking economic damages. The cost of money and time does not matter to them. They pursue everybody, regardless of the job level. These firms usually make it very clear to everyone who works in the company that they have no qualms about protecting themselves.

Some companies would rather negotiate with the exiting employee about limitations and come to an agreement about what everybody will or won’t do. The majority of organizations in the United States don’t want legal hassles, much less the expense and distraction they cause. So, often, these organizations will come to a “non-solicitation” agreement with the candidate who is leaving to go to work for a perceived competitor. Basically, these agreements state that the exiting employee will not communicate, sell to, or solicit the specific customers/clients they had worked with while being employed with the company they are leaving. An employee leaving the company should have a really good idea before they go to work for a competitor how their organization deals with this. Just remember that every case might be different and just because they might’ve come to this kind of an agreement with a previous employee who left doesn’t mean that they would agree to it with you.

In situations where companies are laying people off, they may request a non-compete agreement in order to receive a severance package. Most candidates that make this kind of an agreement understand exactly what they agreed to.

Interestingly enough, since 1973, I have seen very few who received a violation of a non-compete agreement go all the way to court. The major reason is – it’s expensive. Most companies are a lot more willing to go to this expense than the departing employee. Some companies, in trying to enforce their non-compete, will threaten to sue not only the candidate, but the company the candidate has gone to work for. Ninety-nine percent of the time the employee’s new company doesn’t want to have anything to do with a lawsuit, especially over an issue like this. (I have, however, known firms who will agree before they hire a new employee to take on the responsibility to defend that employee as well as themselves if a lawsuit comes about. It’s very rare and he did his only for a very high level position.)

Even if the initial stages of a threatening lawsuit begin…i.e. a “cease and desist” letter is sent and/or attorneys on both sides have to begin negotiating, it’s going to cost the new employee money. I read recently that the average cost for a candidate to negotiate a non-compete arrangement, to everyone’s satisfaction, after they had gone to work for the competitor, was $12,000. Some opportunities may well be worth that kind of investment. But when you consider the emotional and psychological strain of this kind of hassle along with the money, most people aren’t willing to do it.

On top of all of this, a new employer, unless they make some kind of agreement to avoid violating a previous non-compete agreement, is going to question your ethics, thinking that, “If you’d steal for them…you’d steal from me.” On the rare occasions that I have seen a lawsuit come about, don’t be surprised if your new employer begins to distance themselves from you just a bit. This is especially true if they are also being sued. Even though they might have agreed to experience this hassle with you, in their hearts, they never really expected a full-blown lawsuit. So, unless you’ve produced five or $10 million in revenue pretty damn quickly don’t expect them to back you up like they said they would.

There are all kinds of facets of a non-compete agreement other than the ones we’ve mentioned here. Most of the issues are not very pleasant. So, if you begin to think that your non-compete agreement doesn’t matter…think again.

…”remember when” may catch up with you

You began your career as a relative snot-nosed kid and even though you performed well, you drank a little too much at parties, missed work or was late once in a while because of those late-night parties. Remember the time that you embarrassed your boss just a little bit at a business function with a little bit of a smartass remark or you thought it was a real good idea to “tell the truth” about what was going on in the department at a department meeting and irritated everybody.

Remember, in spite of all of this, you got promoted and your newfound “authority” went to your head and you were the ‘cock of the walk’ for some time. Until, of course, your department didn’t do so well and your boss’s boss implied it was your fault. And then there was a time when you and your department were the number one department for the year… and you reminded everybody about it for a very, very long time. Remember the time that you played favorites with one of your direct employees and everybody could see it. Remember when you told one of your employers where they could take their job and stuff it, just before he resigned and went to another company. Remember when you let your personal life get in the way of your performance and, even worse, when everybody in your organization knew about it because you talked about it incessantly.

Remember when you got “encouraged” to leave a company with the understanding that as long as you left quietly, no one needed to know the real reason. Remember the year you were promoted again, knowing that it was as much politics as it was performance and half of the folks didn’t think you deserved it. Remember when you rub it in with the people that didn’t think you deserved it and, even though you performed extremely well, you reminded them from time to time how they didn’t support you.

And, as your career grew, even though you performed well, you made a couple of enemies and instead of making peace, you fanned the fire and made it clear that it was you versus them. In fact, you got a little bit of a competitive charge out of it, thinking that kind of scenario just comes with business. All along you kind of just figured that you’re always going to have some kind of enemies and it wasn’t any big deal.

Well, a month or so ago a real good opportunity to change jobs came along and you went for it. It was a VP job and a real step up from what you been doing. After the third interview, the company you were interviewing with checked a “backdoor” reference with some people you had worked with before. And in the process, one, some, or all of the things you “remember” got uncovered. It just cost you the job.

Might be too late for you, but you might want to remind the kids that work for you even one or two levels below you that whatever you do as you climb the ladder will be remembered and you will be cursed or blessed by what others remember also.