The FTC Non-Compete Ban: A Shift Toward Healthier Leadership and Work Culture

For 20 years, I sat in the seat that most managers feared: I was the person on the other end of the call recruiting away their best performers. It was easier than you would think, and that was even before the FTC banned non-competes from employment offers.

In a survey conducted by the U.S. Government Accountability Office, most employers responded that they ‘rarely or never’ enforced a non-compete. The threat of legal action did most of the work for them. Now that they have been banned, organizations have the chance to not just survive with the status quo, but to thrive in a new world where the focus is mainly on the factors engaging employees in their work instead of those preventing them from leaving.

What the Non-Compete Ban Means for Toxic Culture

Non-compete clauses have long been a double-edged sword. While they protect company interests, they often allow for toxic environments to fester, with bosses unchecked and employees unable to escape to more fulfilling opportunities. This ban opens the gates for employees to leave unproductive or harmful workplaces without fear of legal repercussions. It’s a breath of fresh air, legally and culturally, and marks a significant step toward dismantling toxic work environments and fostering a healthier, more dynamic professional landscape.

In an assessment my firm conducted with more than 6,000 responses from 74 different countries, starting in 2019 and capturing employee engagement from before, during, and after the pandemic, we found that 69.5% of workers say they do work that makes them proud, yet only 35.8% say they serve under a leader who inspires them to be their best. This stark contrast highlights how poor leadership is a significant factor in employee dissatisfaction and turnover.

Subtle Signs of a Bad Boss

From my experience interviewing thousands of professionals, I’ve identified the types of bosses who drive employees away:

• Micromanagers: A boss who cannot delegate or trust their team often stifles innovation and breeds resentment. Our research indicates that only 25.1% of workers feel they can effect change that allows them to do more aligned work.
• Credit Hoarders: When leaders fail to acknowledge their team’s efforts, it diminishes motivation and loyalty. In fact, we found 90.9% of workers report that it is vital to them to feel appreciated in their work.
• Poor Communicators: Inconsistent or unclear communication creates confusion and anxiety among employees. Our report shows that only 39.4% of workers have sightlines into the bigger picture or strategic plan of their company.
• Know-It-Alls: Leaders who cannot accept constructive criticism tend to perpetuate their own flaws, affecting the entire team. We learned that 52.7% of workers feel empowered to seek feedback and mentoring.

These signs may not always be glaringly obvious, but they cumulatively create an environment where employees feel undervalued and overworked.

Strategies for Managers to Improve Their Leadership Styles

Given the new landscape shaped by the FTC’s non-compete ban, it’s imperative for leaders to adopt strategies that promote a positive and productive work environment. Here are some strategies that we found excite and engage employees:

1. Embrace Open Communication: Encourage an environment where feedback flows freely. Regular check-ins and open forums can help leaders stay attuned to their team’s needs and concerns. Ask questions like, “What do you need to successfully solve this problem?” instead of imposing solutions. Remember, workers who feel they have some control report significantly higher levels of job satisfaction.
2. Invest in Employee Growth: Show commitment to your team’s professional development. Offer opportunities for training, mentorship, and career advancement. When employees see a path for growth, they are more likely to stay engaged and loyal.
3. Foster a Culture of Recognition: Regularly acknowledge and celebrate the contributions of your team. This doesn’t just mean financial rewards; a simple thank-you note or public recognition can go a long way in boosting morale.
4. Delegate and Trust: Micromanaging is a quick way to demotivate your team. Trust your employees to do their jobs and provide them with the autonomy they need to innovate and excel.
5. Lead by Example: Demonstrate the behaviors and attitudes you wish to see in your team. If you value work-life balance, ensure you’re not sending emails at all hours. If you expect collaboration, be open to others’ ideas and contributions.
6. Build Relationships: Strong relationships between leaders and their teams are crucial. Take the time to understand your employees on a personal level. Knowing their aspirations, strengths, and challenges can help tailor your leadership approach to meet their needs. The report notes that workers who serve under a good leader but lack a strong relationship still face significant levels of unhappiness.
7. Prioritize Mental Health: Create an environment where mental health is a priority. Offer resources and support for employees dealing with stress or burnout. Encourage a healthy work-life balance and be attentive to signs of overwork.
8. Encourage Diversity and Inclusion: A diverse team brings a wealth of perspectives and ideas. Foster an inclusive culture where everyone feels valued and has the opportunity to contribute to their fullest potential.

Start Now

The FTC’s non-compete ban is more than a legal change; it’s an opportunity for organizations to rethink and reshape their leadership and culture. By addressing toxic behaviors and adopting more inclusive and supportive leadership practices, managers can ensure their teams are engaged, motivated, and loyal. As we move forward, let’s embrace this change as a chance to build workplaces where everyone can reach their highest potential. After all, success is not just about achieving goals but doing so in a way that brings out the best in everyone involved.

Laura Gassner Otting is a renowned Mindset Coach, Keynote Speaker and the Wall Street Journal Bestselling Author of Wonderhell: Why Success Doesn’t Feel Like It Should, and What to Do About It and Limitless: How to Ignore Everybody, Carve Your Own Path, and Live Your Best Life.  You can receive her free Limitless Assessment here, and find her on social media @heyLGO.