FTC proposes rule to ban non-compete agreements for workers

[Velar Fricative]

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The proposed rule would ban provisions of labor contracts known as noncompete agreements, which prevent workers from leaving for a competitor or starting a competing business for months or years after their employment, often within a certain geographic area. The agreements have applied to workers as varied as sandwich makers, hair stylists, doctors and software engineers.



Studies show that noncompetes, which appear to directly affect roughly 20 percent to 45 percent of private-sector U.S. workers, hold down pay because job switching is one of the more reliable ways of securing a raise. Many economists believe they help explain why pay for middle-income workers has stagnated in recent decades.

...........

The public will be allowed to submit comments on the proposal for 60 days, at which point the agency will move to make it final. An F.T.C. document said the rule would take effect 180 days after the final version is published, but experts said that it could face legal challenges.

[NewOrleans]

🙌

one more way of protecting businesses and corporations over people. Get them gone!

[goldengirlz]

I hope this goes through.

My dad had a 90-mile non-compete clause in his contract. Toward the end of his career, he had to pull his youngest kids out of school and move two hours away from everyone he’s ever known just to find another job.

Non-competes are incredibly exploitive. I was happy to find out that they’re already illegal/non-enforceable in California.

[Velar Fricative]

I always try to understand the other side of the argument but none of the pro-noncompete points here matter to me at all lol. Like, the cost of doing business is that, yes, someone you've trained and given secretive info to can indeed jump ship elsewhere. That's business. If they're that valuable, pay them more. Or don't be a toxic dumpster fire to work for.

[Velar Fricative]

Jan 5, 2023 10:16:07 GMT -5 goldengirlz said:

I hope this goes through.

My dad had a 90-mile non-compete clause in his contract. Toward the end of his career, he had to pull his youngest kids out of school and move two hours away from everyone he’s ever known just to find another job.

Non-competes are incredibly exploitive. Also, they’re already illegal/non-enforceable in California.

Yeah, the article mentioned how several states have such laws but many workers aren't aware that they're non-enforceable. Seeing that there's a noncompete is enough to just assume they can't jump ship.

[Velar Fricative]

Also why the fuck do sandwich makers need noncompetes? Is how you put the cheese inside the bread proprietary? Like, Subway doesn't want Blimpie to know they place the condiments in the sandwich in a super special way?

[goldengirlz]

Jan 5, 2023 10:20:00 GMT -5 Velar Fricative said:

Jan 5, 2023 10:16:07 GMT -5 goldengirlz said:

I hope this goes through.

My dad had a 90-mile non-compete clause in his contract. Toward the end of his career, he had to pull his youngest kids out of school and move two hours away from everyone he’s ever known just to find another job.

Non-competes are incredibly exploitive. Also, they’re already illegal/non-enforceable in California.

Yeah, the article mentioned how several states have such laws but many workers aren't aware that they're non-enforceable. Seeing that there's a noncompete is enough to just assume they can't jump ship.

Oh, I’m allll for a national law. I was only pointing out that the arguments against them don’t hold water when a state with one of the largest economies in the world — and that prides itself as being the center of innovation — can still keep on kicking without them.

[rubytue]

Jan 5, 2023 10:21:21 GMT -5 Velar Fricative said:

Also why the fuck do sandwich makers need noncompetes? Is how you put the cheese inside the bread proprietary? Like, Subway doesn't want Blimpie to know they place the condiments in the sandwich in a super special way?

Well, if one remembers the trademark subway u-gauge of the 90s. That was a special type of training 🤣

Side note, my first post college job offer was to open up a new subway for the franchisee I was working for. At the time, considered it, bc $$$. I often wonder how that would have gone. 

[aurora]

Jan 5, 2023 10:20:00 GMT -5 Velar Fricative said:

Jan 5, 2023 10:16:07 GMT -5 goldengirlz said:

I hope this goes through.

My dad had a 90-mile non-compete clause in his contract. Toward the end of his career, he had to pull his youngest kids out of school and move two hours away from everyone he’s ever known just to find another job.

Non-competes are incredibly exploitive. Also, they’re already illegal/non-enforceable in California.

Yeah, the article mentioned how several states have such laws but many workers aren't aware that they're non-enforceable. Seeing that there's a noncompete is enough to just assume they can't jump ship.

When H left his former employer to start his own company a decade ago he had a lawyer review his non-compete/solicit and was told that it wouldn't be enforceable in our state, but also cautioned that that didn't mean the company wouldn't *try* to enforce it. In other words, H could still have to deal with a lawsuit, even if he'd very likely win. (In the end, his former employer didn't sue, but it was still daunting to consider.)

ETA so I really hope this law goes through federally!

[Captain Catnip]

Jan 5, 2023 10:16:07 GMT -5 goldengirlz said:

I hope this goes through.

My dad had a 90-mile non-compete clause in his contract. Toward the end of his career, he had to pull his youngest kids out of school and move two hours away from everyone he’s ever known just to find another job.

Non-competes are incredibly exploitive. I was happy to find out that they’re already illegal/non-enforceable in California.

My non compete is listed as while employed + 2 years, can't work in the same industry in distribution or manufacturing ANYWHERE IN THE UNITED STATES, CANADA, MEXICO, or THE CARIBBEAN!!!! It's crazy. It isn't really an industry that I ever thought I'd be in and the office is 5 min from home. But still...

[bronxgirl]

Although I've never been personally affected by this, I've always hated non-compete clauses and I hope this legislation goes through.

[mala]

Jan 5, 2023 11:07:47 GMT -5 Captain Catnip said:

Jan 5, 2023 10:16:07 GMT -5 goldengirlz said:

I hope this goes through.

My dad had a 90-mile non-compete clause in his contract. Toward the end of his career, he had to pull his youngest kids out of school and move two hours away from everyone he’s ever known just to find another job.

Non-competes are incredibly exploitive. I was happy to find out that they’re already illegal/non-enforceable in California.

My non compete is listed as while employed + 2 years, can't work in the same industry in distribution or manufacturing ANYWHERE IN THE UNITED STATES, CANADA, MEXICO, or THE CARIBBEAN!!!! It's crazy. It isn't really an industry that I ever thought I'd be in and the office is 5 min from home. But still...

That wouldn't be enforceable, since it's way too broad geographically. Doesn't mean that the company can't give you shit for it, but you'd win in court. Non-competes can't be so broad that they would prevent you from earning a living entirely.

[Captain Catnip]

Jan 5, 2023 11:31:21 GMT -5 mala said:

Jan 5, 2023 11:07:47 GMT -5 Captain Catnip said:

My non compete is listed as while employed + 2 years, can't work in the same industry in distribution or manufacturing ANYWHERE IN THE UNITED STATES, CANADA, MEXICO, or THE CARIBBEAN!!!! It's crazy. It isn't really an industry that I ever thought I'd be in and the office is 5 min from home. But still...

That wouldn't be enforceable, since it's way too broad geographically. Doesn't mean that the company can't give you shit for it, but you'd win in court. Non-competes can't be so broad that they would prevent you from earning a living entirely.

That's my thinking, too, but from what I did see on a few employment law sites is that in PA the only stipulation geographically is it can't be larger than the area you do business in.

[glw]

Oh this would be life-changing for MH! Fingers crossed.

[tiki]

I am very in favor of this legislation as I've always hated non-competes and have refused to sign more than one. I do not find it at all convincing that businesses NEED to restrict employees in this way given how many successful companies (Apple for one) are headquartered in California and seem to do just fine.

[tiki]

Jan 5, 2023 11:31:21 GMT -5 mala said:

That wouldn't be enforceable, since it's way too broad geographically. Doesn't mean that the company can't give you shit for it, but you'd win in court. Non-competes can't be so broad that they would prevent you from earning a living entirely.

Often the non-compete specifically includes language such as 'I agree that these restrictions are reasonable and do not prevent me from earning a living' to thwart this argument.  Also the legal fees just to appear and argue that it shouldn't be enforced were estimated to me once at $25-30k. 

[Michelle]

As long as there is still protection from taking a company's intellectual property and creating your own business using it, I'm all for this.

They aren't enforceable in Texas. The only way they might be is if you have an actual employment contract in place you sue the other employer for hiring your contracted worker and committing tortious interference. Seems pretty fair to me. Give the person the security of a contract to work under or leave them to the free market. You can't do both.

[seeyalater52]

Jan 5, 2023 10:18:35 GMT -5 Velar Fricative said:

I always try to understand the other side of the argument but none of the pro-noncompete points here matter to me at all lol. Like, the cost of doing business is that, yes, someone you've trained and given secretive info to can indeed jump ship elsewhere. That's business. If they're that valuable, pay them more. Or don't be a toxic dumpster fire to work for.

I love that this mentality of the power imbalance between workers and companies is going by the wayside little by little. It’s damn time that employers had to come to the table and actually offer something to the people whose labor they depend on.

[smock]

This is a huge issue for freelancers, too. I signed a noncompete agreement with one of my clients that's very narrow. Recently the client suddenly went on a "brief hiatus" (i.e. stopped giving freelancers work), and I spent a lot of time reviewing the noncompete when looking for new clients.

Turns out the agreement isn't enforceable in my state (WA), which sets thresholds for how much employees/independent contractors need to earn before you can enforce a non-compete (along with other restrictions). But that doesn't stop clients from potentially suing anyway. It would be a major step in the right direction to ban noncompete agreements.