Before you say “yes” to that dream job, you better read the fine print.
Noncompetes, which prevent employees from setting up their own businesses in the same industry and working for competitors for a period of time after employment ends, can be very painful, says wedding dress designer Hayley Paige Gutman.
Gutman shared his testimony with the Senate economic policy subcommittee on Monday, three-and-a-half years after a non-compete legal battle with his former employer, JLM Couture, began. and three months later the US Federal Trade Commission announced a new antitrust law.
Hayley Paige. Photo by Dia Dipasupil/Getty Images for Runway Heroes
Gutman was not allowed to work in the wedding dress industry for five years after she left her employer due to a non-compete.
“I could start over with a new name, I could open new social media accounts and rebuild, but I couldn’t work in the job I chose,” said Gutman.
The FTC estimates that about one in five Americans, or about 30 million people, are subject to noncompetes. According to the agency, blocking these deals would add 8,500 new businesses per year and increase wages for average workers by $524 per year.
The non-compete ban was set to go into effect on September 4, but legal challenges could delay, or even cancel, its implementation.
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Opponents of the ban, however, they say that businesses may benefit from non-competition because workers cannot use what they have learned to establish rival companies. Agreements also help protect trade secrets and retain employees for a long time.
In his testimony, Gutman detailed how he 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 violated non-promotion rules by using the social media accounts of @misshayleypage, which had more than a million followers, to promote other companies without JLM’s permission.
JLM also attributed the company to Gutman’s popularity on social media, and appearances on TLC’s “Say Yes to the Dress” and “Say Yes To America” TV shows that only happened because Kleinfeld Bridal. , where “Say Yes to the Dress” was recorded, is one of JLM’s biggest clients.
“I used the dollar I once earned designing wedding dresses to fight for my right to fight again,” Gutman said in his testimony, adding later, “I want to show how non-competitors operate shamelessly on the same highway: if they don’t limit competition between companies, why do we limit it between individuals?”
@sheischeval
Let the girl design the dress ????
♬ original sound – CHEVAL | Shoe Designer
Gutman and JLM eventually reached a settlement 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 his long legal battle in a June interview with the Independent Business Podcast.
“What you work on works for you,” Gutman said, responding to a question about what advice he would give to other small business owners. “The obstacle is the way.”
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