News : Job Opportunities at Tapestry, Alexander McQueen and Toteme

Monday, April 29, 2024

Job Opportunities at Tapestry, Alexander McQueen and Toteme

In this week's Careers Newsletter, read BoF senior correspondent Sheena Butler-Young's latest: The Rise and Fall of Noncompete Clauses, Explained.

Last week, the US Federal Trade Commission issued a sweeping ruling that severely curtails the use of noncompete agreements, dealing a major blow to what has become a key way many fashion companies retain talent.

Initially, noncompete clauses, which bar former employees from working for a rival for a set period, were reserved for the fashion industry's highest-level hires, such as creative directors and senior executives with "unique skills" and access to proprietary information, said Elizabeth Kurpis, a New York-based fashion lawyer.

However, over time, the use of noncompetes began to expand. Fashion began extending these restrictions to less senior employees who pose "minimal to no competitive risk," according to Kurpis. That mimicked a trend seen in many industries – famously, sandwich makers at the fast-food chain Jimmy Johns were bound by noncompetes up until the restaurant agreed to end the practice as part of settlement in cases filed by attorney generals in New York and Illinois in 2016. (It's rare for fashion store employees to be subject to them, recruiters and employment attorneys say.)

Still, rather than being used to protect company's trade secrets and other creative properties, noncompete agreements became "a retention tool," meant to keep employees at all levels from seeking out new work, said Caroline Pill, partner at executive search consultancy Heidrick & Struggles in London.

Critics say that broader usage can suppress wages and hinder career growth. Noncompetes have generated pushback from employees, as well as scrutiny from regulators and lawmakers. Before the FTC's ruling, around 30 states had laws limiting noncompetes based on factors like salary, industry and duration of employment. California outright bans them.

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