FTC intends to ban noncompete clauses that bind 30M US workers
arstechnica.com
arstechnica.com
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.
To be fair, pay is irrelevant in this context. Abusive non-competes should be banned, whether in the state's or elsewhere.
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.
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.
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.
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...
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.
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.
If all three of those get axed there should be a noticeable improvement in overall productivity.