The FTC Just Banned Noncompete Agreements And It's A Huge Deal
The FTC Just Banned Noncompete Agreements And It's A Huge Deal
Commissioners approved the historic regulation on the grounds that noncompetes stifle competition for workers. A legal challenge is all but certain.
The FTC’s three Democratic members were in favor of adopting the regulation, while its two Republican members were against it.
...
“The FTC estimated that the ban would boost wages by between $400 billion and $488 billion over 10 years.”
Employers are required to tell people that existing noncompetes are void:
The new rule makes it illegal for employers to include the agreements in employment contracts and requires companies with active noncompete agreements to inform workers that they are void. The agency received more than 26,000 comments about the rule after it was proposed some 16 months ago. The rule will take effect after 120 days, although business groups have promised to challenge it in court, which could delay implementation.
Good old Republicans, unable to even look like they give a shit about common employees.
This isn't even common employees, C- levels hate this too. Republicans and just being miserable bastards to everyone, name a better combo.
Boards don’t like it though. They’d rather spend $100 million (maybe way less though, politicians are cheap) to fight to save $400 billion in the long run.
Now do arbitration agreements in employment contracts. Good luck arguing that the employer is still enforcing non-competes, when you have to do it in confidentiality through an arbitration provider your employer has already pre-selected.
Do NDAs used to cover up illegal shit, too. Settlements shouldn't be able to include anything to make the settlement or circumstances around it secret. It just enables them to continue doing what they were doing to others.
Arbitrators can't issue injunctions (ie they can't order you not to work somewhere), so they don't really have any way to enforce a non-compete.
From the article...
The FTC’s three Democratic members were in favor of adopting the regulation, while its two Republican members were against it.
... and ...
The FTC’s rule does not include a salary threshold, but it has an exception for noncompetes when a business is sold.
The final rule also allows existing non-competes to be enforced for senior executives. But all other such contracts would be rendered unenforceable when the rule is implemented
That exception is very much like the one in California, where the founders of a startup can be required to sign a noncompete when they sell it. Has essentially no material impact on anybody else.
Yeah it looks like they're trying to preserve somewhat of the non-complete clause viability for senior management especially when companies are bought and sold.
The FTC’s three Democratic members were in favor of adopting the regulation, while its two Republican members were against it.
Not surprising in the least. Of all the Republican hypocrisy their attitude towards workers using their value to increase their earnings is one of the worst. They claim that they support self reliance and building yourself up, but stuff like this shows that it's clearly a lie. They support businesses maximizing their earnings by charging what the market will bear, but as soon as a worker tries to do the exact same thing they lose their God damn minds.
“bOTh sIdeS ArE thE sAmE”
The FTC website says it has an exception for Senior Executives which it defines as people making over 151k and are involved in policy making decisions.
Rhetorical question: why do bills like this include specific wage amounts when those amounts are bound to become obsolete? Why not make them a variable, like the percentage of the cost of living?
The Jimmy John’s noncompete barred workers from taking a job at a competing business within two years of leaving. It defined a competitor as any business that is located within 3 miles of a Jimmy John’s and derives at least 10% of its revenue from “submarine, hero-type, deli-style, pita and/or wrapped or rolled sandwiches.”
Wouldn't want Subway to steal those sandwich secrets.
Especially since they are owned by the same VC.
but what about hoagies?
You go to Hoagie Country, you take your life in your own hands.
Wait, the entirety of the FTC is 5 fucking people?
The FTC has about 1000 employees, including five commissioners.
The commission which sets policy is five people. The FTC as a whole has over 1000 staff
The controlling board, yes. How many does it take to sign off on final rules?
FYI the FTC has tens of thousands of employees.
Lol, the two republiclowns voted no..... BUT they're looking out for ya right? Idiots.
Brb, poaching all my asshole former employers clients.
I assume the clients were getting royally fucked to be so poachable.
Well welcome to web development support. It ain't worth $200/mo
Or the few good employees they have.
Only once I can't handle it myself
Well, naturally. Noncompetes are anti-capitalist and Republicans hate capitalism.