FTC intends to ban noncompete clauses that bind 30M US workers(arstechnica.com)
arstechnica.com
FTC intends to ban noncompete clauses that bind 30M US workers
https://arstechnica.com/tech-policy/2023/01/ftc-proposes-ban-on-noncompete-clauses-says-they-violate-workers-legal-rights/
23 comments
A easier way to limit non competes to a minimum would be to require companies to pay a full salary to workers while the noncompete is in effect. No matter if they quit or are fired.
Good. A company shouldn't have the right to tell me I can or cannot work elsewhere based on their own arbitrary definition of competition that I'm forced to agree to in order to possess a livelihood.
Hopefully non-solicitation agreements are next.
And maybe bans on doing other work outside of work hours?
If all three of those get axed there should be a noticeable improvement in overall productivity.
If all three of those get axed there should be a noticeable improvement in overall productivity.
Considering that is how our public school system is run, off of unpaid teacher hours, I highly doubt it.
I believe the post was referring to “moonlighting” for pay, or building a side company evenings and weekends. Not disallowing unpaid overtime.
Aren't they already illegal? (ref to the infamous Jobs/Google email chain).
Within the US, I believe enforcement of non-solicitation agreements is going to be dependent on the state.
A non-solicitation agreement is not strictly the same as collusion between companies to agree to not hire away each other’s employees.
If I sign a non-solicitation agreement, I as an employee cannot move anywhere else and try to hire former coworkers for some period of time.
The scandal that happened among multiple tech firms (not just the ones you mention) was that several companies agreed at the top level not to recruit and/or hire one another’s employees.
A non-solicitation agreement is not strictly the same as collusion between companies to agree to not hire away each other’s employees.
If I sign a non-solicitation agreement, I as an employee cannot move anywhere else and try to hire former coworkers for some period of time.
The scandal that happened among multiple tech firms (not just the ones you mention) was that several companies agreed at the top level not to recruit and/or hire one another’s employees.
Big discussions from a few days ago:
https://news.ycombinator.com/item?id=34254183
https://news.ycombinator.com/item?id=34260577
https://news.ycombinator.com/item?id=34254183
https://news.ycombinator.com/item?id=34260577
Apparently the case that really ticked off the FTC was a security company threatening to try to hit security guards for $100K if they left for a competitor.
https://www.cbsnews.com/news/noncompete-agreement-feds-sue-3...
Not highly compensated employees. People who were likely making less than $20/hour (possibly under $15/hour), being threatened to be smacked for $100,000 which would be absolutely life ruining for such workers.
https://www.cbsnews.com/news/noncompete-agreement-feds-sue-3...
Not highly compensated employees. People who were likely making less than $20/hour (possibly under $15/hour), being threatened to be smacked for $100,000 which would be absolutely life ruining for such workers.
Jimmy John's used to make the teens that made your sandwiches sign non-competes. It stopped after this became public causing horrible publicity and lawsuits from the New York and Illinois attorney generals.
That is just unjustifiably gross. I get wanting to have noncompetes for people with nonpublic information that could be used to harm the company (note: I said “get” and not “agree”), but to slap a non compete on a close-to-minimum-wage worker whose most secret information is how many pickles to put on a sandwich? Makes my skin crawl.
Agreed completely - these are clearly anticompetitive in nature, rather than anything to do with protecting company IP.
FTC is probably overdoing this though; I sat out a full year on a compensated noncompete couple years back for a very good reason and the use case is still very much there for industries with sensitive information.
Proscribing noncompetes will make hiring very difficult going forward - one bad hire and your alpha walks out of the door...
FTC is probably overdoing this though; I sat out a full year on a compensated noncompete couple years back for a very good reason and the use case is still very much there for industries with sensitive information.
Proscribing noncompetes will make hiring very difficult going forward - one bad hire and your alpha walks out of the door...
I think the fear is a bit overblown. California already doesn't allow non-competes as far as I know.
There are already criminal and civil remedies available if trade secrets or IP are misused. Preventing employees from taking other employment based upon some hypothetical possibility is Minority Report territory and should not be socially acceptable.
Surely these were never enforceable, but I guess people don't know better. Reducing the asymmetry of knowledge is also key here.
To be fair, pay is irrelevant in this context. Abusive non-competes should be banned, whether in the state's or elsewhere.
To be fair, pay is irrelevant in this context. Abusive non-competes should be banned, whether in the state's or elsewhere.
>To be fair, pay is irrelevant in this context.
You think someone making $15/hour isn’t any more likely to be swayed to do what a company says, compared to someone making 6-digits a year, when being threatened by a $100,000 fine? Do you actually believe that?
This has happened with take out chefs. Dog walkers making minimum wage. People who might be living close to the margin (or at least not in great circumstances) — who need even the crappy jobs they have, and cannot afford missing work for court, never mind the cost of representation if they can’t get it for free - nor the terrifying reality they’re being conducted into thinking will occur if they don’t play ball.
You think someone making $15/hour isn’t any more likely to be swayed to do what a company says, compared to someone making 6-digits a year, when being threatened by a $100,000 fine? Do you actually believe that?
This has happened with take out chefs. Dog walkers making minimum wage. People who might be living close to the margin (or at least not in great circumstances) — who need even the crappy jobs they have, and cannot afford missing work for court, never mind the cost of representation if they can’t get it for free - nor the terrifying reality they’re being conducted into thinking will occur if they don’t play ball.
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>Surely these were never enforceable, but I guess people don't know better.
Even if the worker knows it's unenforceable, it's still a threat and the worker would have to fight it in court if challenged.
If I walk up to someone half my size in the middle of the day and threaten to beat them up if they don't give me their lunch money, it's still a threat even if that person knows it's illegal and suspects I'm unlikely to actually beat someone up in public.
Even if the worker knows it's unenforceable, it's still a threat and the worker would have to fight it in court if challenged.
If I walk up to someone half my size in the middle of the day and threaten to beat them up if they don't give me their lunch money, it's still a threat even if that person knows it's illegal and suspects I'm unlikely to actually beat someone up in public.
People certainly don't "know better" when their only form of legal knowledge is finally scrutinizing the papers they allegedly agreed to. Most people don't even know the clerical machinery of looking up authoritative contacts for Corporations/LLCs in their state's databases, never mind having enough understanding of prevailing law to know something written on an official sounding paper is blatantly false. Knowingly drafting a contract with blatantly illegal causes should be prosecuted as giving improper legal advice.
There's no penalty for drawing up a non-enforceable non-compete to create a chilling effect on the job market.
If a company goes after an individual, they have to pay for lawyer fees to fight it on top of being unable to take up the competing offer. It's a huge burden.
If individuals were awarded massive payouts for companies trying to enforce non-competes that arent enforceable under state law, you'll see this behavior change quick.
If a company goes after an individual, they have to pay for lawyer fees to fight it on top of being unable to take up the competing offer. It's a huge burden.
If individuals were awarded massive payouts for companies trying to enforce non-competes that arent enforceable under state law, you'll see this behavior change quick.
At least within the US it’s always been my understanding that enforceability of non-competes is dependent upon state law.
Under this reading of their authority they equally have the power to impose noncompetes on workers - it's all readable as "unfair competition", right?
Given the Supreme Court's recent jurisprudence on the major questions doctrine I'm skeptical this holds up in court.