Pending Business: Non-Compete
By Steve Lapa
Lapcom Communications Corp
President
It’s complicated, this whole Federal Trade Commission ruling potentially banning the non-compete. Considering where you stand on the non-compete concept, it’s really all about evaluating the five “C” profile of your media business.
Personally, I sit at a roundtable where all sides are given equal consideration. More about that roundtable later.
First the five Cs of your media business: Company, Culture, Customers, Competition, Compensation. Let us define each.
1. Company – What is the image and reputation of your Company (management) internally?
Externally? Is your Company viewed as a destination or last resort for employment?
2. Culture – Is the atmosphere on your sales team or in your talent pool upbeat, positive performance driven, supportive, with access to key management? Is there a feedback loop that makes employee voices valued in this new world of Zoom, Teams, etc.? Is achievement recognized in a positive manner? Do sellers and talent have input into goals? Are missed goals treated like broken glass or the start of a learning curve?
3. Customers – Advertisers and audience are important customers. Advertisers, the cash register of any ad-based media model, move in only three directions – increase their spend, decrease their spend, flatline spending. Audience scale is the currency of your performing talent. Audience, like advertisers, can only go in three similar directions – increase, decrease, level off. If you are a subscription-based media entity, pay close attention to overdelivering subscriber expectations and lowering churn.
4. Competition – Keep a close eye on what your competitors are paying, how they are recruiting and what they are changing.
5. Compensation – My favorite. Have the courage to pay for performance at the high end and many of your non-compete clauses may not be needed.
Check the boxes on all five Cs in the model as outlined. Now back to my roundtable.
When you consider your company’s view, the non-compete in any media business that provides training (sales, talent, and other personnel), promotional investment, exposure to confidential research and strategies, is not simple to eliminate.
Consider the following:
1. The talent/show that is backed with a six-figure promotional campaign. Should the talent/show be allowed to seek employment at a competitor who is smart enough to realize, your company invested the money to make the talent/show a success, and all the competitor needs to do is revise compensation and lift a few restrictions? Your company’s investment could never be paid back.
2. Ever sit in on a focus group project? When the participants open the perception spigot, the bucket can fill up with verbal gold. Whomever gains access to that research and the resulting strategic change in direction has their hands on confidential information that can help drive results off the charts. How is the company’s investment in that research protected? What about the employees learning how it all works?
3. Good sales training, seminars, and off-site are not cheap, and considered an investment in all sellers and management. Should you really be permitted to walk across the street with no notice and all that expensive training in your laptop?
I’m writing this column as a roundtable, considering all sides and it is still complicated.
Steve Lapa is the president of Lapcom Communications Corp. based in Palm Beach Gardens, FL. Lapcom is a media sales, marketing, and development consultancy. Contact Steve Lapa via email at: Steve@Lapcomventures.com.
compete effective in the Philadelphia market for six months after the official separation. This comes after Gargano announced his role as a content provider for AllCity Network’s new Philadelphia sports content platform PHLY and Beasley charged that Gargano was violating his deal with WPEN. According to the terms of the preliminary injunction, Gargano can’t do any work for AllCity that appears on PHLY; he may do a national podcast and radio show with Brian Baldinger but PHLY can’t promote it; he can’t divulge confidential information about Beasley practices and can’t solicit Beasley clients until 18 months after the date of the injunction. 
Dan McDowell and Jake Kemp has its next court date on September 15 for Cumulus’ Renewed Emergency Application for Temporary Restraining Order and Request for Preliminary Injunction. Cumulus is suing the duo for alleging they have violated their non-compete and other clauses in their contracts with the company. The two sides have been ordered to mediation over the matter.
their podcast “The Dumb Zone,” arguing that it violates the terms of their contracts, specifically the non-compete clause. McDowell and Kemp left “The Ticket” in July after being unable to come to terms on a renewal due to the two sides’ disagreement over digital initiatives. Since then, the two have been producing the aforementioned podcast. In response to the suit filed by Cumulus, McDowell and Kemp argue, “Plaintiff’s business is the operation of terrestrial radio stations – old media – and it was only in that business that Plaintiff employed Defendants. Plaintiff has realized only too late that it should have been moving into new media platforms for years now. Defendants’ new venture does not compete with Plaintiff, and their words and actions have complied with the restrictive covenants of their employment contracts despite, as will be shown below, almost all of those covenants are illegal restrictions on Defendants’ rights under the National Labor Relations Act.” Mediation has been set for August 22.
Tuesday (8/8), Cumulus filed suit against the duo on August 4 claiming they are in violation of several clauses in their contracts with the company. McDowell and Kemp left Cumulus last month after they were unable to come to terms on a renewal to remain with “The Ticket.” The sticking point was their desire to explore digital initiatives outside of their work with Cumulus. They have since launched a podcast via Patreon that Cumulus says violates their six-month non-compete. The company also alleges the two have violated the non-solicitation and non-disparagement clauses of their contract and additionally alleges they have “commandeered” company-owned social media accounts, threatened to release “conversations Defendants illicitly recorded” with company executives. Cumulus is seeking “emergency injunctive relief” plus attorneys’ fees and costs. McDowell told listeners to the podcast released on Sunday (8/6), “We’re working with certain advisors. We’ve been advised that we are doing nothing wrong, so don’t stop, for now. So right now, we are putting this out there, and what’s in store for tomorrow? I don’t know.” 
come to terms on a renewal to remain with “The Ticket.” The sticking point was their desire to explore digital initiatives outside of their work with Cumulus. They have since launched a podcast via Patreon that Cumulus says violates their six-month non-compete. The company also alleges the two have violated the non-solicitation and non-disparagement clauses of their contract. It alleges the duo have “commandeered” company-owned social media accounts, threatened to release “conversations Defendants illicitly recorded” with company executives. Cumulus is seeking “emergency injunctive relief” plus attorneys’ fees and costs.
Dominion Voting Systems settlement but Carlson remains under contract to FOX (through the end of 2024) and is still being paid by FOX. This is a fairly standard non-compete situation found in most television and radio contracts. Carlson and his attorney, Harmeet Dhillon, argue that FOX is attempting to stifle Carlson’s First Amendment rights. This case appears to be headed to court. 
was a violation of the non-compete portion of his contract. Axios reports that Carlson’s lawyers say, “Any legal action by FOX would violate [Carlson’s] First Amendment rights.” The Axios piece goes on to say that Carlson is accusing FOX News of breach of contract for breaking their promise to not settle the Dominion Voting Systems lawsuit in a manner in which it would indicate wrongdoing on the part of Carlson. It’s been reported that firing Carlson was a part of FOX’s settlement agreement with Dominion. 
competing news outlets through 2025. Carlson and FOX parted ways several weeks ago but Carlson’s contract with the media firm could keep him from working from another media outlet while FOX continues to pay him $20 million per year. Reimann’s piece indicates that Carlson is fielding offers from numerous conservative news/talk outlets including Newsmax, Rumble, One America News, and The Daily Wire. Freedman told Axios, “The idea that anyone is going to silence Tucker and prevent him from speaking to his audience is beyond preposterous.” 
Harris tells the Tampa Bay Times that there is interest from other broadcasters but the six-month non-compete in his iHeart contract prevents him from working elsewhere right away. Harris says he didn’t get the chance to do a farewell show – something iHeartMedia West Florida president Chris Soechtig denies. Salem Media Group says it’s offered to host a farewell show on its crosstown news/talk WGUL “AM860 The Answer,” but also doesn’t want Harris to get into a legal tussle. 
