The NAM is opposing the Federal Trade Commission’s proposed ban on all noncompete agreements, pushing back on a move that would damage the manufacturing industry. We talked to NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling about the NAM’s reasoning on this crucial issue.
What noncompetes do: As Boerstling puts it, manufacturers use noncompete agreements only for select workers handling their most sensitive information.
- That information might include the details of the company’s most sophisticated processes and strategies, which cannot be allowed to fall into competitors’ hands.
- Not only do these employees handle the keys to a company’s success, Boerstling added, but they are the recipients of significant investments in time, compensation and training.
The potential damage: Banning noncompetes would force companies to revamp their human capital operations completely, argued Boerstling.
- It would mean that trade secrets or other essential information might walk out the door and be exploited not only by competitors, but also by foreign adversaries.
- Manufacturers would be forced to put in place burdensome controls or silo parts of their operations from each other, which would result in less training for employees and less efficiency across various divisions.
- In a highly competitive industry—not to mention during significant economic uncertainty—that is a high price to pay, Boerstling pointed out.
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