Non-Competes Divide Integrators

By: Ari Erenthal, Published on Jun 12, 2017

Non-competes are controversial legal agreements that prohibit parties (typically employees) from working in a similar role or trade of their employer. So if Al works at ABC integrator and signs a non-compete, Al might be sued by ABC if he goes to work for XYZ integrator across town.

More than 150 integrators told IPVM how they feel about non-competes, with respondents overall divided:

Inside, we examine why integrators feel the way they do about non-competes, sharing the 3 main reasons for and against non-competes.

*** **** ******* *********** were *** ***-******* ********** were

  • ********** ***** ********** ** employee ********
  • ********** *********** **** ******** clients
  • ********** ************** **** ******** clients

*** **** ******* *********** were ******* ***-******* ********** were

  • ***** ** ****** ** seek *** *************
  • ***-******** *** ******* ** unenforceable ** **** *************
  • ****** ********* ** **** non-compete ********** ****** * breach ** ***** **** them

For - ******** ******* ********** ** ********

********* *** ***** ***** employees ** *** *** certifications **** ** ** assured **** **** **** get * ****** ** their **********.

  • "******** *********** ****** ** protected ******* ********* ****** hopping ******* *********."
  • "*********** ****** * *** of ***** ** *********** to ***** ****."
  • "** *** ******* * am ******* *** ** investing *** ***** *** time ** ******* ** talent * ****** ** willing ** **** **** my **** ****** ** succeed."
  • "*'* *** *** **, after ********* **** *** money ******** ********* ** serve ** * *** of **********."
  • "** **** **. ******** investments ****** ** ********* against ********* ****** ******* between *********."

For - ******** *********** **** ******** *******

*********** ***** **** *********** with ************* **** ******* will ** ** ******* company *** **** ***** clients **** ****.

  • "***** **** *** * necessity *** ***** ****** that ***** **** *******, customer *********, *** ******** and *** **** ** harm *** ******* **** are *******."
  • "*** ** *** ******** and ***** ******."
  • "*** ** *********** *********."
  • "********** *** *****, * do *** **** ***** personnel ******* *** ******** customers **** ****."
  • "* ***** ** ** fair ** **** ***** people **** *** ******** that ** *** ***** them ** ***** *** accounts **** **** ******** while ** *** ****** of *** ******* - company ********* **** **** to ****** *** *******."
  • "***** ***** ** ***** to *** ******** ** sales ******* *********."

For - ********** **** ************** ******** *******

*********** ***** **** ************** will ******** **** ** approaching *** ***** *** offer ** **** *** them ********.

  • "** **** **** **** them."
  • "***-******** *** * **** when ** ***** ** using **** ******* *** can "***** ** ***" in ********."
  • "** ** *** **** non-competes, ****** ** ** were ** **** * subcontractor *** ****."
  • "* ****'* **** * sub **** *** ****, and ** **** ** our ****** *** ****** them **** ** **** for ***** *** **** we **** ****** *** to ** *** ****. That ****** ******* *** to *** ** ******* then **** *** **** with *** *** *** all * *********. **'** going ***** *** ****** client *** *** ***'* go ***** *** ***."

Against - ***** ** **** ** **** *** *************

*********** ***** **** ***-******* agreements ******** *********' *******.

  • "** ** *** **** such *********. ** ** against **** ******."
  • "******* ** ********* ***'* potential."
  • "******* ***-*******. ****** *** prospects *** *********** *********."
  • "*'* ********** ******* **. Employers ****** *** **** the ***** ***** ** choose ***** ** ********** works ***** ******* * company, ********** ** *** employee *** *** **."
  • "******* **. **** ***** a ******* ***** ** earn * ******."
  • "**** ** ******** **********, having **** ******* *** you ** **** ********* that ******* **** ******* to **** * ****** seems **** ************, ** the *****."
  • "******* **. **** ********* limit ****** *******. *** non-competes * **** ******* to **** ***** **** limited ** **** ******* for *********** (***** * understand) *** **** **** any ******* ** *** business ****, ******* *** manufacturer ** ********. ******* unacceptable. * **** ****** security ** ** ******, I ***** ** ******** over ** *** ***** industry."
  • "* ***** **** ** think * *** **** anywhere * ****, ********** if ***** ** * better *********** *** ** at * ********'* ** competitor's ********."

Against - *************

***-******* ********** *** ****** restricted, *************, ** ******* in **** *************, ********* them ****.

  • "*** *********, **** *** basically *************."
  • "* **** *** ******* non-competes ** ***** ****** unenforceable, ***** *** **** & ********** ************ **** to ***** *** ************."
  • "*'** **** **** **** don't **** ** ** NC."
  • "**** *** ********* ** enforce, *** *** ***********, who *** ****** *********, they *** ********** ******* by *** ******."
  • "*'* ** *** ************* that ***-*********** ********** ** not ***** ** ** court."
  • "**'* ****** *** ** issue ** **, ** the ****** **** *** Void."

Against - ****** ** ***** **** *********

********* *** ******* ***** creating *** ***** ******* themselves *** ***** *********.

  • "** ********* ***** ***** employees ****, **** ******'* worry ***** *** ********."
  • "** * ******* ***** to **** ** ******** treat **** ***** **** won't *****. ** ******* them ******* *** ****** hand ***** ** **** so **** **** ***** leave."
  • "***'* **** ****. ***** factor ** ****** ****** you ***** ** ****."
  • "******* **. ** *** cant ***** **** *****, don't **** ****."
  • "** **** ** ****** an *********** ***** ********* want ** ****, **** opportunities ** **** *** advance. ** ***'* **** to "*****" ** "****" employees ** ******* * non-compete ********."

Balanced / **********

******* ********* *** *** advantage ** ***-******* ********** but ******* **** ***** never **** *** **********, as ***-******* ********** *** all *** ***** ** the ***** ** *** employer.

  • "* ***** ** ** owner **'* * ******** tool. ** ** ******** it *** ** *********."
  • "*'* *** ** ** long ** *** ****** is **** ** **** sides. ** ****** ***** be **** ********* ** i *** ** **** a ****. ** ****** are ***** ** ***** for ******* ******* *** can't ******* **** ***%. The ******* ***** ***** needs ** **** * little **** ***** *** that **** ******."
  • "******* ** *** ***-*******. We **** ** **** them ****** ** *** employees ** ** ******* wants ** ** **** it ** ** ********** then * ***** **** to ***** *** *******."
  • "**********, * ******'* **** one, * **** ** interest ** ******** **** we *** *** *** not **... ** **** all ** *** **** sign ***-******** *** *** employees."
  • "* ** ** *** fence ***** ***-********. * think **** *** **** in *** ***** *****, however * ***** **** are * *** **** for ********* *****. * think **** *** * necessity *** ***** ****** that ***** **** *******, customer *********, *** ******** and *** **** ** harm *** ******* **** are *******. *** *** technicians **** ** **** left ** * ********** most *** ***** **** with * ********** ******* because ** *** ******* manufacturers ******* ** ** integrator ** **** ** the ****** ******** *** integrator ***."
  • "***********. * *** *** advantages *** ************* ** both ***** ** *** argument. ***, *** ******** owner ***** ** ******* its *** *********, *** an ******** ****** *** have ** ** *** through *********** ******** ** leaving * ******* ** work *** ******* ***."
  • "* ********** ***** ****** for ********* *** *** a ******** ***** **** them. ******* * ** not ***** **** ****. I ***** **** ** a ****, ****, & competitive ****** **** ****** not ** *********. ** a ******** ** ****** care ** *** ********* and ********* ** *** best ** *** ******* a ***-******* ** *********. Since ** ***'* **** in * ******* *****, and ** *** ********* people, **** ********* **** we *** ***-******** ** protect ********."

Options - ***-************

***-************ ************* ******* ****** **** is **** ****** / restrictive ** *** ********. With * ***-************, *** goal ***** ** ** prevent *** ******** **** selling ** *** *******'* existing ********* ** ********** former **-*******. ** **********, not ******* ** *** company's ******** ********* ********* potentially *** **** ***** element ** ***********, **** a *** *********** ** manager **** ** * rival ********** *** ******* succeeds ** '********' **** account. ** ******, **** the ******** ** *** end **** **** ********* their ******* ** ****** a *** ********** **** a ********* *** *******.

Comments (37)

I loath non-compete agreements. It shows you do not trust your employees. If you do not want your talent to leave after training them, treat them right and pay them competitive salaries. 

What if you sign a non-compete and your employer, lays you off, decreases your pay, or takes away your benefits? There has to be a clause in there that protects employees, right. If not, employers can treat you like trash and walk all over you.

I am OK with Non-solicitation, but non-competes are a joke. IMO

 

 

What if you sign a non-compete and your employer, lays you off, decreases your pay, or takes away your benefits? There has to be a clause in there that protects employees, right.

Not a lawyer but my understanding is that typically, even if you were laid off, the non-compete would still be enforceable, as in there is likely no clause in non-competes that waive the agreement for lay offs. An employee could take it to court and a judge might find it unenforceable but that implies / requires the employee to pay for typically non-trivial legal expenses.

I also strongly dislike non-competes. I have known a lot of people over the years who had to suffer significant personal disruption due to non-competes.

I'm not a lawyer either, but my understanding would be it depends. In a lay off situation since the employee did nothing to cause the situation in some states (such as Texas) it might be viewed as hindering the employee's ability to maintain employment and be considered unenforceable. If they were fired however, this would be a different case and usually be held enforceable (if such agreements are enforceable in your jurisdiction).

In a lay off situation since the employee did nothing to cause the situation in some states (such as Texas) it might be viewed as hindering the employee's ability to maintain employment and be considered unenforceable

Could be, however what if the employer tells the laid off employee that they plan to enforce / sue the employee if he goes to a competitor? Even if the employer is wrong and would lose a court case, the employee can't be sure of this and will be in a weakened position financially to contest.

The mere presence of the clause and even bluffing from the employer can still be significant in impacting the employee going to a competitor.

I have seen this situation unless the it is a sensitive position and you have secret, top secret access. 

Then there has to be a level of protection for the company. 

Company has this employee in sensitive areas and knowledge would compromise the security of the facility. 

Loose Lips Sink Ships

He would be under contract not to pass on any information. 

This is where these contracts would be enforceable. 

some Positions are not nogotiable and would devastate the company or client. 

Better to keep a good relationship with the employee. 

Then there has to be a level of protection for the company.

Company has this employee in sensitive areas and knowledge would compromise the security of the facility.

And that's what a non-disclosure (NDA) is for. A non-compete is not necessary to legally enforce not sharing sensitive / confidential / non-public information.

Agreed , But Too many times life's problems change peoples values 

Good people Corrupted by bad decisions, or pleasures with a price. 

These agreement s help secure the stability of the employee, if completed in a proper method. 

Not as a bad thing. But as a commitment to loyalty, integrity

seen too many to think otherwise

 

I agree wholeheartedly with this. Let's call them by what they really are, a form of indentured servitude.

This is a gross generalization I know, but I have met many people who are pro non-compete and they are typically the first ones to scream 'free market' when it comes to other things. Non-competes by their very nature go against a free market in that they limit competition which is the driving force behind a free market economy. California got it right, I think it's a matter of time before other states strike them down as well. We'll see though.

This sounds just like the NFL.  Where the owners have too much power and contracts are primarily one sided.  :)

Trust , Thats the name of the Game , But Respect goes right with it. 

Vetting, backgrounds, training to company standards and expectation s also prevent the need for Non Compete clauses

If someone Does not have any integrety , why would you hire them anyway. 

Good Background investigation is the answer

Siemans it a good example of this . 

Could take up to a year to get vetted. 

I won't sign one.  If you don't believe your company can provide enough value for me to work there, how can I tell customers that we'll provide enough value to buy my stuff?

To add to this, and for the sake of full disclosure, I have signed one in the past when I was pretty desperate.  It was a terrible company for which to work.

I used to be for Non-Compete's, but I think its just too damaging to the employee's future. Plus you have to understand these facts:

- if a superstar employee leaves to go work for someone else, it may be your fault either for good or bad. Dont hinder someones growth because you cant afford it or that the employee cant stand working for you or would rather work for someone else.

- If a significant part of your business is leveraged on one employee then your not doing your job as a business owner providing more value to your business. All your value is in the superstar employee. 

Here in California, employee non-compete agreements are void.  There are other laws that protect trade secrets from being shared with competitors once an employee leaves.

And that is why Silicon Valley has so much innovation occurring - employees can leave for a new startup without fear of overly broad protectionism promoting litigation.

like access codes, passwords, and such that you can get from anyone on the internet and download info that is suppose to be secret. 

this is why many company's dont let installers have any programming info. 

 

Yet I constantly get upload, download info from support to help them accomplish those take overs. 

 

It is at the point where , when we take over a system , we replace it 

even if new Dmp, bosch, adt or what ever 

Non Compete's Just keep management thinking they still have some control in the process. 

I started working with the company I am with now 4 years ago.  I came on board because the employee before me quit and took the client list with him to the competition and was already calling them to switch.  My first day wasn't on training to learn cameras but rather to keep the clients.  I asked them why they didn't have a non-compete and they said they didn't think they'd ever need one.  Lesson learned.  The irony is that the number one reason why people didn't like us before I came on board, was the the previous rep never returned his phone calls.  

employee before me quit and took the client list with him... I asked them why they didn't have a non-compete and they said they didn't think they'd ever need one. Lesson learned

That's a reason for a non-solicitation clause, not a non-compete.

Also, Rich, did you sign a non-compete? If so, what do you plan to do if you ever want to work elsewhere in the industry?

The agreement I signed was for non-solicitation and states that I cannot reveal any company secrets as they are considered intellectual property.  I can work for another company in the industry.

Rich, there you go. You did not sign a non-compete :)

Most company Non compete's have time out periods or expiration dates 

It is to protect the company , not the employee

limitations on language of non compete. 

Not that you cannot work somewhere else , but you cannot use that confidential information to leverage accounts or steal from others ( polite way of putting it) 

Most instances of termination are not good and so you the employee have to have something to hold back your anger from termination and limitations as to what is , and what is not transmitted to others. 

Keeps security Secure. where it is supposed to be. 

Just FYI , anyone who is working for someone else , no matter who is an indentured servant with a certain expectation from who they serve. 

 

Not that you cannot work somewhere else , but you cannot use that confidential information to leverage accounts or steal from others ( polite way of putting it)

That's wrong. A non-compete is, by definition, a restriction on where someone can work. By contrast, an NDA is a restriction on what information can be share / used.

NDAs and non-competes are separate items. They can be combined together but they are fundamentally distinct.

At a certain pt I agree, But that being said ,

I would want something in place that secures ownership

Info, Asset protection, proprietorship.

Seen Too often where employees with attitude did not work out early on , had to fire, let go with attitude.

After all said and done found out they were very destructive in actions against company and use what they learned from us to help competition.

Non Competes keep them from taking your assets away and using your failures to start their own ventures against you. 

Not about Job, its about integrity, and failure s thereof.

anyone can work anywhere they want

The non Compete keeps the employee from setting up against you , completion with your own process, and failures

 I signed many in past , seen no harm, no problems, no liabilities against them, when I started my own company. 

The law Protects both side s . 

Been in court with this and seen the judge site with the employee. 

I feel this is a Trust Statement , not a liability statement 

I can send lots of them and they all word differently , but help keep the trust element in place. 

 

 

I have seen this scenario many times in the past with others 

Even did not believe it when a school district manager brought it to my attention and gave me all the codes, details , etc of the other company

As leader, in large organizations, with plenty of lawyers and money to spend, my experience is that:

- Non-solicitation clause is applicable and can be reinforced. Now, as plaintiff you will have to prove the damage cause by the employee.

- Confidentiality clause can be reinforced. Again, you will have to prove the damages.

- Non-compete are rarely enforceable, except if you pay the period for which you prevent an employee to find a job (and support his family). If you don't pay the non-compete period.... the best you can do is be a pain on the back and slow down an employee hire, rarely you can stop it.

My two cents, one man experience.

Thanks for sharing, helpful, one thing here:

Non-compete are rarely enforceable

This may be but the practical issue is that most staff employees don't have the legal connections or the cash to spend on litigation.

I've seen this play it out. If you are an engineer or early career sales person, you likely don't know where to start litigating something like this and will be nervous about spending the thousands of dollars and potentially weeks or months litigating this.

John - Fair point. Companies bet on the fact most employees can't afford or will not seek legal advice. 

Another Problem with these kind of agreements is that it set up and attitude between the employee and employer 

Instead of these  agreements you want to set of a progressive step program which rewards the employee as they achieve steps and earn their way up the ladder to management and rewards as they become a better asset to the company. 

You get a higher trust level with each step upward in the co. 1,3,5,7,10,20 program. manager s always at the 10,20 level and rewards for sucess. 

It is all about perks, Benefits  , not always about Pay, Money 

This Create Loyalty and is a success driven approach 

and the employee see s a reason for success , instead of just making some one else rich.

Success,Rewards, Discipline

this also keeps out the disloyal employees early on .

I have met and Just met a great employee of another company who loved his job, was proud of his company, and touted about what his company does for him and I really enjoyed working around him.  

I strongly feel that non-competes limit employee mobility and bargaining potential, contributing greatly to the wage stagnation and decline of the middle class.  I understand wanting to protect your training investment and preventing solicitation of your clients.  There are other methods of achieving both these goals.  Is a golden shackle really worth keeping a unhappy employee locked into a position they do not enjoy?  How about a reasonable non-solicit and pre-training agreements to reimburse for paid manufacturer training?

if you have that many concerns about employees leaving for greener pastures how about greening your pasture up a bit rather than planting a leash with a peg?

pre-training agreements to reimburse for paid manufacturer training?

Thanks for bringing that up. That too can be a barrier to employee mobility or an operational issue.

I've seen that happen a few times where a company wants to send a tech to manufacturer training and the tech is genuinely torn about what to do because they are afraid if they leave the employer will demand being repaid thousands of dollars for a training that may not even be that useful in the future.

I do not disagree.  It is something I have personally experienced when younger and earning a pittance.  However, it is something I can control and to me that is more important than the unknown cost of litigation.  If I disliked a position that much I would prefer to "buy my way to freedom" rather than be forced to potentially face unemployment and completely unknown court costs.

I looked at bidding a Project for a International company and turned it down due to the sensitive nature of the contracts and agreements . 

Sensitive Jobs Demand Great enforceable agreements 

This is were their can be no compromise. 

If you work in this type of environment, this is a risk you take 

So the real issue here is not the agreement or contract not to compete 

it is Attitudes, Integrity, Reliability, and what is being protected. 

Siemans , RFI, Adt  and lot s of others ( I cannot mention ) have these agreements in place and live by them in order to maintain strict confidentiality. 

There has to be a level of protection in place for both parties involved. 

I worked with several tech's on various project s who told of instant termination from company's which they were told they violated the trust, process, protocol of the company standards. 

So these do work and are in place with high tech , they have to be. NO Choice due to the caliber of people and nature of work and projects 

I have to wonder what our demographic is made up of for IPVM members. I have nothing but intuition to go off of but I imagine that there are more owners and management that subscribe than technicians, which could skew the results towards favorability of NCA's. The results are interesting to me either way. 

more owners and management that subscribe than technicians

That sounds reasonable / correct to me but we've never surveyed what 'role' / title people have. It raises a good idea and I've queued it up for inclusion in a future survey. Thanks!

Interesting lawyer's post on LinkedIn advocating against application of non-competes:

This all applies equally to manufacturers.  Again, Nod-Solicit and Non-Disclosure agreements are fine and make sense.

At my previous employer I went from superstar to "out of favor" following a change in managers.  I continued to work, produce good sales numbers etc.  But it was clear that I was no longer a valued part of the sales team.  I started looking around.  Got to the job offer phase with a competitor.  Their legal department iced the offer because they were afraid of legal costs related to the non-compete.

Result: Multiple years stuck in unhappy employment before finally pulling the plug.  This was difficult financially and led to a lot of uncertainty and stress.

Non-competes are bad for employers and for employees.  They favor bigger companies and incumbents because they have the legal & financial resources to threaten employees and smaller companies.  In this sense, non-competes stifle innovation.

I refused to sign a non-compete with my current employer and won't sign one in the future.

 

NOTICE: This comment has been moved to its own discussion: I Refused To Sign A Non-Compete With My Current Employer And Won't Sign One In The Future

NOTICE: This comment has been moved to its own discussion: I Refused To Sign A Non-Compete With My Current Employer And Won't Sign One In The Future

NOTICE: This comment has been moved to its own discussion: I Refused To Sign A Non-Compete With My Current Employer And Won't Sign One In The Future

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