Understanding the FTC’s Nationwide Non-Compete Ban: A Guide for Wedding Business Owners

Discover how the FTC’s ban on non-compete agreements impacts wedding business owners. Learn strategies to protect your business and adapt your employee contracts effectively.

What Wedding Pros Need to Do: FTC Bans Non-Competes Nationwide

Brandee Gaar: The FTC just recently banned all non-competes across all 50 states in the United States. And y’all, this has caused quite a ruffle with business owners, especially wedding business owners who are now asking so many questions like, why would I move a contractor from a contractor to an employee if I’m not even protected against them starting their own business now? How can I protect myself when it comes to my employees not taking all of my confidential information and starting their own business tomorrow, right next door?

Understanding the Impact on the Wedding Industry: Unpacking the FTC’s Decision

Brandee Gaar: So, today we’re going to dig into what this new ban on non-compete agreements means for you as a wedding business owner and how you can protect yourself and your business as you’re bringing on team members, either as an employee or as a contractor. My guest, Paige Griffith, is here to dig into all things legal when it comes to the new FTC non-compete ban and what you can do to protect your business as you’re growing your team.

Welcome to the Wedding Pro CEO Podcast Blog

Brandee Gaar: Hey there CEOs. This is the Wedding Pro CEO podcast and I’m your host Brandee Gaar. I’m a wedding pro just like you who’s built one of the largest planning firms in Orlando, Florida. But it wasn’t that long ago when that success came with long days, sleepless nights, and little to no pay.

Fast forward to today, and I have the business that I’ve always dreamed of. A killer team, steady profits, and weekends with my family. Over the past three years, I’ve taught over a thousand wedding pros how to do the same. My mission is to create a movement of wedding pros who are building a profitable business that they’ve always dreamed of.

Paige, I am so excited to have you back on the show. You have been a multi-time guest and obviously one of our partners that we love, love, love having our students be able to go to The Legal Paige and get all their legal advice for their wedding businesses. So welcome back to the show.

Paige Griffith: Thanks for having me. I’m excited to be here.

The Legal Landscape of Non-Competes: An Expert’s Insight

Brandee Gaar: So Paige, today, we’re going to get right into it because this is such a hot topic for all business owners, especially wedding business owners. What do I do about this new ban on non-competes? Can you kind of catch everybody up if they don’t know what this ban is? What even is happening?

Paige Griffith: Yeah, so a couple of weeks ago, the FTC, the Federal Trade Commission, issued a final ruling. They’ve been thinking about it for a while. This has kind of been in the political landscape for the past four years, ebbing and flowing depending on the political landscape of the U.S. and how much federal authority is involved in employment and contractor relationships. The FTC ruling essentially says that non-compete clauses and contracts are no longer valid in employment agreements. It’s a major change.

Brandee Gaar: Yeah, I’m not going to lie. I have non-competes in all my employee agreements, but they’re very employee-sided. I was given advice early on to make it reasonable, with a short cooling-off period. So, what do wedding business owners do now? How can they protect themselves when employees can now start their own business right away?

The Shift from Contractors to Employees:

Navigating New Waters

Brandee Gaar: One of the biggest questions from my students is, what would be the benefit now of moving someone from a contractor to an employee? Can you talk us through that?

Paige Griffith: Absolutely. Non-competes were never allowed in contractor agreements. For employees, they had to be limited in scope and time. Now, with this ban, there are still many benefits to having employees over contractors. Employees provide loyalty and commitment that contractors, who work for multiple businesses, might not.

Brandee Gaar: Yes, having employees bought into your culture and brand is invaluable. But many wedding business owners are concerned about the additional costs, like payroll taxes. Can you explain why these costs are worth it?

Paige Griffith: When you have employees, you have more control over their schedules and tasks. Employees are all-in with your business, providing better output and long-term loyalty. Contractors, while flexible, may not always give their full effort since they juggle multiple clients. Investing in employees can lead to better project outcomes and business growth.

Brandee Gaar: That makes a lot of sense. So, with the non-compete ban, what are some alternative clauses we can include in our contracts to protect our wedding businesses?

Crafting Stronger Contracts: Beyond Non-Competes

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Paige Griffith: Great question. Here are a few key clauses to consider:

Confidentiality Clause: Protects your trade secrets. Make sure you clearly define what constitutes a trade secret in your business.

Non-Solicitation Clause: Prevents former employees from poaching your clients or other employees. However, this needs to be carefully worded to avoid resembling a non-compete.

Non-Disparagement Clause: Ensures former employees cannot speak negatively about your business.

NDA (Non-Disclosure Agreement): Similar to a confidentiality clause but more comprehensive. It ensures any confidential information remains protected.

Contractor Agreement and Employee Contract

Independent Contractor Agreement: Are you ready to outsource but don’t want to open yourself up to a ton of liability?

Employee Contract: Are you looking to hire someone to come work for you in your office and want to control their hours, what they work on, and potentially give them a non-compete with other work?

Brandee Gaar: Perfect. These clauses can provide solid protection without relying on non-competes. And for those wondering, how should wedding business owners handle the transition from non-competes to these other clauses?

Paige Griffith: Notify your employees about the non-compete ban and introduce these new clauses in their contracts. You might need to draft a new employment agreement that reflects these changes. It’s a good opportunity to reinforce your business’s commitment to protecting its interests while staying compliant with the new regulations.

The Legal Paige’s Mid-Year Sale: A Golden Opportunity

40% Off the Best Contracts and Clauses for Wedding Industry CEOs

Brandee Gaar: Paige, you mentioned The Legal Paige’s mid-year sale. It is my favorite sale you do. Please tell everyone more about it!

Paige Griffith: Yes, from May 20th to May 23rd, we’re offering 40% off our entire shop. It’s a great time to add essential legal documents to your toolkit, like NDAs, employment agreements, and independent contractor agreements. We also have specific contracts for various wedding business needs, including wedding planners and photographers.

Brandee Gaar: That’s fantastic. I always tell my students to take advantage of this sale to ensure they have the best legal protection for their businesses. Thank you so much for being here today, Paige. This has been incredibly helpful.

Paige Griffith: Of course. I hope everyone found this information useful.

Before We Go

The FTC’s ban on non-competes is a significant change, especially for wedding business owners. While this shift can seem daunting, understanding the legal landscape and adapting your contracts with alternative protective clauses can ensure your business remains safeguarded.

Paige Griffith is a lawyer but she is not your lawyer. Remember to consult with an employment lawyer in your state/region to tailor your agreements to your specific needs and state regulations.

For comprehensive legal contracts and clauses, The Legal Paige’s mid-year sale is an excellent opportunity to update your toolkit and stay ahead of the curve.

Use code BRANDEETLP10 at checkout for an additional $10 off your order! Click Here for all the contacts and clauses you will need.

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