FTC Votes to Ban Noncompete Agreements

This is great news, in my opinion.  Big business will fight it to the death.

https://thehill.com/business/4615452-ftc-votes-to-ban-non-compete-agreements/

The Federal Trade Commission (FTC) voted 3-2 on Tuesday to ban noncompete agreements that prevent tens of millions of employees from working for competitors or starting a competing business after they leave a job.

From fast food workers to CEOs, the FTC estimates 18 percent of the U.S. workforce is covered by noncompete agreements — about 30 million people.


Chamber of Commerce has already filed suit in Texas to overturn it. No doubt they will, considering the court makeup.

https://www.nytimes.com/2024/04/24/business/lawsuit-ftc-noncompete-ban.html?unlocked_article_code=1.nE0.Blma.9T-Nf1zjJrQr&smid=url-share

The choice of forums for the lawsuits puts the challenges in front of
Trump-appointed District Court judges, J. Campbell Barker in the Eastern
District and Ada Brown in the Northern District. Any appeal would be
sent to the Fifth Circuit Court of Appeals in New Orleans, where 12 of
17 judges were nominated by Republican presidents, with six by Mr.
Trump.


I was presented with one of these long ago and asked advice from a lawyer. He said never sign away your ability to earn a living. I crossed that sh*t out and told the employer, and they accepted it. I know not all employers will accept it. If leaving the company takes knowledge, they should compensate the employee for the duration of the non-competition agreement. But the fact that companies like Burger King force this on people is deplorable. It depresses the value of their labor.


Aren't these legitimate in some cases?   For example a sales person leaves employer A and takes with them all their accounts to the competition.  


Apparently that can be covered by a different type of agreement, possibly "non-solicit," and similarly with employer's confidential information.  Hard to restrict use of what an employee has learned, though, if not too specific?

See "related restrictive covenants" here: https://en.wikipedia.org/wiki/Non-compete_clause

(IANAL! totally)


upthecreek said:

Aren't these legitimate in some cases?   For example a sales person leaves employer A and takes with them all their accounts to the competition.  

You could make an argument that this unfairly favors the employer. It takes away (or restricts) a powerful negotiating tool from the employee. 


upthecreek said:

Aren't these legitimate in some cases?   For example a sales person leaves employer A and takes with them all their accounts to the competition.  

Legitimate is what the government decides it to be. California bans all such restrictions, I think. Or close to all anyway.


For psychologists and most therapists, restrictive covenants are currently against public policy in NJ, as far as taking patients with them if they leave a therapy practice.  The client is supposed to be free to choose whatever is in their best interests, and clients are not treated as if they are simply the "property" of the business.  



In order to add a comment – you must Join this community – Click here to do so.

Real Estate Listings

Sponsored Business

Find Business

Advertisement

Advertise here!