After 26,000 public comments, FTC to vote on rule banning noncompete agreements

[BumRushDaShow]

Source: NPR

APRIL 23, 20245:00 AM ET


After receiving more than 26,000 public comments, the five members of the Federal Trade Commission are set to vote Tuesday on whether to issue a final rule banning noncompetes, declaring them an unfair method of competition.

In a statement last week, the FTC said the final rule under consideration "would generally prevent most employers from using noncompete clauses." It's not yet clear how the final rule differs from the version first proposed in January 2023.

A noncompete agreement typically blocks a worker from going to work for a competitor or starting up a competing business of their own. The FTC estimates about 30 million people, or one in five American workers, from minimum wage earners to CEOs, are bound by noncompetes The Biden administration has argued that these agreements harm workers by lowering wages and hurt the U.S. economy by stifling entrepreneurship.

"The freedom to change jobs is core to economic liberty and to a competitive, thriving economy," said FTC Chair Lina M. Khan in a statement when the proposed rule was first introduced. "Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand."

Read more: https://www.npr.org/2024/04/23/1246430110/noncompete-agreements-ftc-ban-lina-khan

[SWBTATTReg]

1. If anything, I'd prefer them to ban these sorts of agreements because djt used them extensively, to hide his illegal

activities. Not to suppress competition, but to suppress news of his illegal activities. Such agreements, to expressly stifle comments of illegal activities, is illegal already from what earlier attempts to breech djt's noncompete agreements he had w/ some he had working for him.

[hueymahl]

2. A ban would be amazing

And a huge boost to industry and entrepreneurial endeavors. Non competes only serve to protect the established businesses from competition at the cost of human freedom to engage in commerce.

[Farmer-Rick]

3. Non-compete clauses keep you from

Using your past experience to get better jobs.

A friend of mine ran a cleaning contract for a large corporation. They made him sign a noncompete clause in order to keep his job, then turned around and fired him 2 months later.

He was offered numerous other jobs of a similar nature. They all backed out on hearing about the non compete clause. He could not manage cleaning services for anyone for a year, according to the clause.

Once a prospective employer heard he had a non-compete clause they were afraid to hire him due to possible litigation. It extended to most any management job he applied to. He stop listing that job, to avoid the issue. But he took a big cut in pay, and lost out on some good jobs because he couldn't list his past experience.

[FakeNoose]

4. This is a real problem, and it happens in technical fields

Young inexperienced employees get hired for (presumably) lower pay and get trained while working for a company that has already made advances and solved technological problems. After a few years and hard work, that new employee has learned the ropes and is free to leave the first employer for more pay somewhere else. That's the American way, am I right? Problem is that the younger employee also takes whatever knowledge is in his/her head and is free to share it with the new employer.

I can see how companies in technological and security fields would think twice about hiring someone if they aren't willing to sign a long-term contract. The NDA prevents this type of "theft" if you want to call it that.

[TeamProg]

6. Hmm. NDAs are written up differently than a Non-Compete contract.

If you sell your business the person who bought your biz doesn’t want you to start up the very same business in the area.

Or if you ran a tax office and sold your business - client list and all , the buyers would want a non-compete clause so you can’t start a new tax office and bring all of your old clients over.

An NDA would cover things like not reporting what went on in an office such as sexual harassment.

[Farmer-Rick]

10. Well, he could talk about it all day

They didn't care that he talked about how he managed a 7 person industrial cleaning crew. There are no real secrets in how to clean industrial spaces. It wasn't specialty equipment he was cleaning. It was floors, walls and bathrooms.

The clause said he couldn't manage any other cleaning crew similar to the one he had. Yeah, it was a little vague but it was enough to scare off future job offers.

[cstanleytech]

8. If they learn things on a job it's little different than learning at a college.

The only time it becomes a real issue is if the new company violates a patent and we have the Courts to help enforce them.

[TeamProg]

5. Yes! Ban the restriction, but do protect copyright and intellectual property rights. nt

[cstanleytech]

7. All a company has to do at the very least is match the offer someone is made to retain them usually.

Most people then would not even switch except for personal reasons unrelated to the job or because they are having problems with someone with whom they are having to work with.

[BadgerKid]

9. Is retroactivity implied?

I know a guy who had to set up a new service something like 30 miles away due to non-compete.