Before you say yes to that dream job, read the fine print.
Not competitive, which stop employees from starting their own businesses in the same industry and working for a competitor for a period after the employment ends can be devastating, says bridal designer Hayley Paige Gutman.
Gutman shared her testimony to a Senate economic policy subcommittee on Monday, three and a half years after starting a noncompete legal battle with her former employer, JLM Couture, and three months after the US Federal Trade Commission announced a new rule prohibition of non-competes.
Hayley Paige. Photo by Dia Dipasupil/Getty Images for Runway Heroes
Gutman was not allowed to work in bridal design for five years after she was fired from her employer for non-competes.
“I could start over with a new name, I could open new social media accounts and rebuild, but I couldn't work at my chosen craft,” Gutman said.
FTC RATINGS that about one in five Americans, or about 30 million people, are under competition. According to the agency, banning the deals would add 8,500 new businesses a year and raise wages for the average worker by $524 a year.
The non-compete was set to be effective commencing September 4but legal challenges may delay or even cancel its implementation.
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However, opponents of the ban, say businesses could benefit from those who do not compete because employees cannot use what they have learned to create rival companies. The agreements also help protect trade secrets and retain employees for longer periods.
In her testimony, Gutman detailed how she signed an employment contract with a non-compete clause in 2011, at the age of 25, with JLM Couture. Nine years later, JLM alleged that Gutman had violated the non-compete by using the @misshayleypage social media accounts, which had more than a million followers, to promote other companies without JLM's permission.
JLM also claimed that the company was the reason for Gutman's social media fame and appearances on TLC's reality television shows Say Yes to the Dress and Say Yes To America only happened because Kleinfeld Bridal, where Say Yes to the Dress”, is one of JLM's biggest customers.
“I've spent every dollar I've ever made designing wedding dresses to fight for my right to do it again,” Gutman said in her testimony, later adding, “I want to show how not competitors operate shamelessly on a one-way highway: if we are not restricting competition between corporations, why are we restricting it between individuals?”
Let a girl design a dress ?????
Gutman and JLM after all reach a settlement agreement in May that gave her the rights to the “Hayley Paige” name and social media accounts. Gutman agreed to pay JLM $263,000.
Now a small business owner, Gutman reflected on her long legal battle in a June interview with the Independent Business Podcast.
“What you work for works for you,” Gutman said, in response to a question about advice she would give other small business owners. “The obstacle is the way.”
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