Judge stops FTC from enforcing ban on non-compete agreements
computerworld.com
computerworld.com
Back to the chevron thing though, how many of you have ever gotten a parking ticket? Imagine two years after the fact some bureaucrat sent a letter informing you that because of your previous bad decisions you're unable to drive. Driving is a privilege, and the state will no longer grant that privilege to you.
Is that decision fair? You already went through the court system (or otherwise paid it off (implicitly, often explicitly, pleading guilty)), a judge took the time to judge your misdeeds, and you had some penalty applied, perhaps the max allowed by the law. Now though, some part of the executive branch wants to ignore any judicial action and assert their opinions.
Even before this ludicrous supreme court case, that was a thing that happened. A whole office in Minnesota is dedicated to extra-judicial traffic rulings above and beyond what the judge thought was reasonable.
I think it's wrong. Empower somebody like the FAA to make fast decisions when there are actually lives at stake, but everything else which could reasonably be judged one way or the other should go through somebody capable of judging it (maybe...a judge). Even FAA rulings probably ought to be vetted once they're less time sensitive.
Ex post facto laws are generally unconstitutional. Generally -- especially as it imposes a new punishment after you've already been punished.
Something like this would almost certainly be implemented as "X driving infractions committed on or after [date law is effective]."
[edit] in administrative law, retroactive application is only permitted when congress has explicitly given retroactive power to an agency.
The FTC ruling on non-competes is no different - no one is saying "a non-compete clause breaks the law in a way that would allow criminal or civil suits", they are saying "this clause is not enforceable" (plenty of standard contract terms are not enforceable depending on state and/or country, and the unenforceable nature of the term does not - for better or worse - invalidate the entire contract).
It’s basic United States separation of powers. If Congress passed a law eliminating or banning non-completes, then it would be legal.
As an asdie, it seems that the Biden administration is positioning itself to overstep it’s authority with things it feels would be popular with specific voting blocks that will obviously be overturned by the courts and then position that the courts are too partisan. They are satisfied with how this works with voters even if the actual policies cannot actually be implmemented.
I don’t think most serious observers felt this would make it through court review.
" (1) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful. (2) The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, savings and loan institutions described in section 57a(f)(3) of this title, Federal credit unions described in section 57a(f)(4) of this title, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to part A of subtitle VII of title 49, and persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as amended [7 U.S.C. 181 et seq.], except as provided in section 406(b) of said Act [7 U.S.C. 227(b)], from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce."
The FTC has argued noncompetes constitute unfair or deceptive practices which affect commerce. The judge has disagreed.
In any event, large decisions like this are made by political appointees appointed by the president and confirmed by the Senate.
With Chevron overturned, we are now allowing unelected career judges interpreting policy however they see fit. If we were still in a world where precedent mattered and judges set their personal beliefs about policy aside and instead neutrally interpreted conformance with the law, sure. But as we now are packing the judiciary with partisans, it seems we've just substitutef one bad for another.
This is not relevant to their right to legislate or assume duties that the constitution has delegated to congress.
> delegated to congress
Right, and Congress has made that law, and that law says it's delegated to the FTC. What, Congress is simultaneously expected to make every single rule ever but they don't even have the rule making power to... delegate? That's too far? Seems absurd to me, almost intentionally insane with the end-goal of kneecapping rule making as a whole.
No. In a democratic republic, you require the consent of the governed to make rules, not expertise.
I think that overturning Chevron should light a fire under the collective behinds of both parties in Congress to write more specific laws that legislate precisely. I am sure it will be mayhem for a while, unfortunately, as decades of laws will be interpreted by the courts for the first time, but in the end it should result in a structure that I believe conforms better to the intended structure (legislators legislate laws which are executed by the executive branch and whether or not those laws are upheld is judged by the judiciary).
As opposed to unelected judges who, unlike the bureaucrats, have lifetime appointments, almost no political oversight, and are very difficult to remove.
The heads of federal agencies are appointed by the President and must be confirmed by the Senate and serve limited terms.
Congress makes the laws.
Government (bureaucrats) enforces the law.
Judges decide if government enforces the law correctly.
The important part is not how bureaucrats or judges get their job but that bureaucrats were de facto creating laws exceeding their authority.
Because the authority to create laws belongs to congress.
It's not a perfect system but it would be even worse without separation of powers.
The issue is that congress are not experts. They also move really, really slow.
I don't expect my congressmen to know if Red 40 is safe to consume, how much can be consumed, if it should be reported as an ingredient, etc. There's thousands of ingredients in food, I imagine. If that was written into law the law would be very long, no?
And then wouldn't it go out of date remarkably quickly? Hence, we have the FDA. They know about Red 40 and also medication.
What level of specificity do we actually need here? Does Congress need to list out, specifically, what molecular compounds are and are not allowed? That seems absolutely absurd to me.
It seems to me that once we get to the FTC or <insert any federal agency you personally disagree with>, suddenly the rules change and congress does need to be absurdly specific.
Funny how that works.
Since the FTC can’t point to an existing law that makes non-compete contracts illegal, it lacks the power to unilaterally declare them illegal.
Most observers didn’t think that this rule would pass court scrutiny.
In every other instance what is required is that experts in the field back up their reasons with adequate research. In this case the FTC has done that, they have argued that non-compete is an unfair practice and shouldn’t be allowed, just like the NHTSA has argued that Airbags are an important enough safety feature that all new cars should be required to have it. Both have plenty enough research to back up their claims, but only the FTC needs a specific law? I wonder why that is.
Do you understand what you're advocating for? You're advocating for literal lawlessness. For anarchy. For giving the government absolute power.
Given that government abuses non-absolute power you can bet that when they get absolute power it'll take about a second to turn any country into Putin's Russia.
Which is most of the time, granted.
Reasonable scope was something like max 2 years, specific distance from current office that wasn’t excessive (couple of miles) or had specifics about taking existing customers.
And you, of course, need to not be an ass and start poaching clients with insider information =)
I also think they are mostly fine in the cases where they are properly constructed (compensation and scope).
Regarding the EU document, there's a very long way between "EU noticed a problem" and "EU fixed a problem".
It's a bit hyperbolic to be sure, but one does wonder how far we are from going full circle here..
Firing on the spot is only legal in exceptional circumstances, e.g. when they can prove you simply didnt work your hours, or something (outside of paid and u paid leave, paid and unpaid sick leave).
We also get maternal and paternal leave which is very nice.
Overtime, health insurance, etc. are also dictated to some degree by law in a lot of countries.
The fact that you (Americans) feel enslaved is because you choose to elect a government that doesn't care about any of that.
In a federal system, as the US is, these are all things you can implement on the state level. You do not need to win at a national level to implement it.
It really depends on the income-strata that you occupy, I feel. Hourly, physical laborers and service workers seem to suffer under a system that prima facie makes you wonder what century you're in. On the other end, salaried and technical knowledge workers enjoy quite a flexible arrange of time off policies, relaxed working times, and great health benefits. And then everything in between. I would like to think that only one of these camps feel enslaved.
Americans do have this problem of not taking enough vacations though. But I think there is some cultural component to that...
You don't speak for "all Americans".
A number of Americans (>1) see their imprisonment as a modern form of slavery, one that is explicitly allowed by the US Constitution:
The U.S. Constitution bans slavery except as punishment for a crime ... In Texas, some prison farms are located on the same land as former slave plantations.
You may disagree with their feelings, but it remains that your blanket statement:
> No American feels enslaved in any meaningful sense of the word.
https://www.heritage.org/crime-and-justice/commentary/the-my...
https://www.brennancenter.org/our-work/analysis-opinion/do-p... (2013)
There is no better time and place to be a criminal in the US than today. Criminals are being coddled, which is why most Democrat cities are so crime-ridden.
> We tried to determine whether official misconduct that contributes to false convictions has become more or less frequent over the past 15 to 20 years. For most types of misconduct, we won’t know for years to come, but we already see strong evidence that a few kinds of misconduct have become less common: violence and other misconduct in interrogations; abusive questioning of children in child sex abuse cases; and fraud in presenting forensic evidence. On the other hand, the number of federal white-collar exonerations with misconduct by prosecutors has been increasing.
https://www.law.umich.edu/special/exoneration/Documents/Gove... (2020)
> According to the cybernetician, the purpose of a system is what it does. This is a basic dictum. It stands for bald fact, which makes a better starting point in seeking understanding than the familiar attributions of good intention, prejudices about expectations, moral judgment, or sheer ignorance of circumstances.
— Stafford Beer (2001)
> It is better that ten guilty persons escape than that one innocent suffer.
— William Blackstone, Commentaries on the Laws of England book 4: Of Public Wrongs (1768)
But it being okay isn't the same as it not happening. I'm not sure why you asserted that it doesn't happen, when it's a well-known problem. See, for example, https://en.wikipedia.org/wiki/Kids_for_cash_scandal (2003–2008), though it's rarely that blatant.
There is no better time and place to be a criminal in the US than today. Criminals are being coddled, which is why most Democrat cities are so crime-ridden.
"Refusal to work can be met with solitary confinement and physical beatings"
https://web.archive.org/web/20240224172720/https://www.washi...
Prolonged solitary confinement is being used for people who do not refuse to work as well, even for people who have not been convicted[1]. You may think it's inhumane, but it not slavery.
[1] https://en.wikipedia.org/wiki/Hope_v._Pelzer
[2] https://en.wikipedia.org/wiki/Hudson_v._McMillian
[3] https://en.wikipedia.org/wiki/Estelle_v._Gamble
[4] https://eu.recordonline.com/story/news/local/2021/07/19/capi...
>It's not the same as being forced to work.
That's exactly the same thing.
So you get more time in prison, losing all rights, which is what happens when you're convicted of a crime? Just because you don't want there to be legal slavery doesn't mean there isn't legal slavery.
Yeah, thanks for that unbiased source.
2) “over 100,000 population”. This is the factor that prevents these from mostly being “red”. I assume this is because smaller cities and large towns are both more likely than large cities to be run by Republicans, and also more likely to have bad economies, which (the latter) is a pretty good predictor of crime.
3) The second graph with per-capita gets us closer to correct, the first being “this is just a population heat map” levels of useless. Note all the “blue” cities in red states in the second one. I’ve lived in such a city. It was hopelessly hobbled by the state government—anything “blue” it tried to do was outlawed at the state level as soon as they tried to do it. You can’t really treat those as experiments in Democratic governance.
I’d say it’s all the poverty in those places, but maybe you’re right and it’s the Republican governments’ fault.
You could break it down per capita instead, which shows that urban area have the highest violent crime rates, and rural areas have the highest property crime rates.
I haven’t been able to find a comparison of cities with Democratic mayors vs cities with Republican mayors.
The source provided does break it down per capita, and when done so, the 10 most violent cities in the US, measured per capita, are either democrat (9) or independent (1) controlled.
https://en.m.wikipedia.org/wiki/List_of_mayors_of_the_50_lar...
It turns out the relationship between crime and population is non linear, and that nonlinearity is also true outside of the US and it's political context.
https://crimesciencejournal.biomedcentral.com/articles/10.11...
So, what you're seeing is bigger cities with higher per capita rates due to the underlying relationship between population density and crime. It also happens to be the case that in the US, urban areas strongly prefer Democratic mayors.
Quoting you: "There are far more cities with Dem mayors than Republican mayors, so comparing raw counts is pretty meaningless. (Similar to counting comparing total homicide instead of per capita.)"
Quoting me: "I did not compare raw counts, I compared per capita counts."
I did not learn anything I did not know before re-reading.
Here is the political affiliation of the city governments:
1. St. Louis, MO: Democrat
2. Detroit, MI: Democrat
3. Baltimore, MD: Democrat
4. Memphis, TN: Democrat
5. Little Rock, AR: Democrat
6. Milwaukee, WI: Democrat
7. Rockford, IL: Democrat
8. Cleveland, OH: Democrat
9. Stockton, CA: Democrat
10. Albuquerque, NM: Democrat
11. Springfield, MO: Independent
12. Indianapolis, IN: Democrat
13. Oakland, CA: Democrat
14. San Bernardino, CA: Democrat
15. Anchorage, AK: Independent
16. Nashville, TN: Democrat
17. Lansing, MI: Democrat
18. New Orleans, LA: Democrat
19. Minneapolis, MN: Democrat
20. Chicago, IL: Democrat
You seem to want to compare P(v|d) to P(v|r). We have little to no data for comparison because there are so few examples of cities with republican mayors. Those that exist are amongst the smaller American cities. This means you need to disentangle the effect of city size on violence rates from the effect of the mayor's party.
I repeat:
There are 10 Republican mayors amongst the 50 largest cities, and furthermore, these are heavily concentrated at the low end.
https://en.m.wikipedia.org/wiki/List_of_mayors_of_the_50_lar...
It turns out the relationship between crime and population is non linear, and that nonlinearity is also true outside of the US and it's political context.
https://crimesciencejournal.biomedcentral.com/articles/10.11...
So, what you're seeing is bigger cities with higher per capita rates due to the underlying relationship between population density and crime. It also happens to be the case that in the US, urban areas strongly prefer Democratic mayors.
https://www.pewresearch.org/short-reads/2024/04/24/what-the-...
Having had relatives had relatives in jail, they are not coddled. Yes, it is better than the past, but in all ways jail, let alone prison, is much worse than being on the outside.
In my view, this just contributes to what makes them crooked. They refuse to enforce the law as it is on the books. This is not justice.
[1]: https://thefga.org/research/soros-district-attorneys-make-ci...
If all they did was prosecute every crime to the fullest extent, they would not need to be elected.
Making society pay for room and board of those that have committed a crime against it is inhumane. At the bare minimum, criminals should be required (not forced) to work, as is the case in some small number of states. In addition, criminals should be expected to make some restitution to society above and beyond this.
Criminals are not the victims, by definition. Society should stop treating them like victims, especially at the expense of actual innocent people.
"More than 76 percent of incarcerated workers report that they are required to work or face additional punishment such as solitary confinement, denial of opportunities to reduce their sentence, and loss of family visitation, or the inability to pay for basic life necessities like bath soap. They have no right to choose what type of work they do and are subject to arbitrary, discriminatory, and punitive decisions by the prison administrators who select their work assignments."
You might claim that "incarcerated workers report" isn't solid evidence, but if you read the report you'll find that much of it was confirmed by responses to FOIA requests.
I also have to work to afford soap. That does not make me a slave.
You are not required to work one, specific job that can be changed at a moment's notice without your consent to afford soap. Almost any work one might do in the market economy is sufficient to pay for basic hygiene products for one person.
I can't have any job I want either, nobody can. Criminals are not entitled to free room and board just because they have injured society. Criminals are not the victims, they are the criminals. They should pay for room and board and make restitution to society.
You can't have any job you want in the sense that you can't e.g. be President of the United States just because you want to. You likely (unless you happen to be in prison right now?) have a choice between at least two at any given time, though.
I suppose exactly zero of (to try to cover all political bases): Chelsea Manning, Julian Assange, the various January 6 convicts, the various people jailed after the George Floyd riots, or even those convicted of things they literally did not do are victims then. There are, always have been, and always will be "convicted criminals" that definitely don't deserve their fate -- though, to be clear, I believe some (not all) of the ones I mentioned do (and you'd probably be wrong if you guessed which were which). They are in the minority, but I'm not willing to deliberately hurt that minority just to also hurt the majority who arguably deserve it.
https://en.m.wikipedia.org/wiki/The_New_Jim_Crow
And if moving pictures are more your thing, there's a movie, too!
My point was more that most people can't afford to not work in the industry they've spent years building competence in, and therefore a no-compete clause makes them very vulnerable to poor practices from the employer. The employer might (in theory) treat their employees poorly knowing that they cannot leave the company, and the employees will be forced to put up with it because leaving employment with a non-compete deal means they can't pay their mortgage.
Calling it slavery is hyperbolic to be sure, but non-competes are undeniably a step in that direction.
American slavery institution is not representative of how this worked for thousands of years. In many societies you couldn’t just randomly kill a slave.
So Are you sure who are the morons?
What do you think it meant to “buy a slave’s freedom”?
Are you claiming Roman slaves were not slaves and both the Romans that lived thousands of years ago and modern historians are wrong to call them slaves?
All of the defining characteristics of slavery are not present. The Roman slaves had no autonomy to choose their employer or to just quit.
The Judge says they can't enforce their new ban.
But does that stop them from trying to stop non-competes using prior law? For example the Sherman Act can cover non-competes. If the FTC started suing hair salons and fast food restaurants under that it might cause enough problems for those businesses that they'd stop using such agreements.
In contract law, the requirement for consideration applies to the contract as a whole, not to each individual clause. An employment contract, as a whole, definitionally provides consideration.
Can you give some examples where "non competes" are signed independently of your employment contracts without consideration? The quoted article refers to them as clauses, and the FTC rule in question is also titled the "Non-Compete Clause Rule" [1].
[1] https://www.federalregister.gov/documents/2024/05/07/2024-09...
Every job I've had is as I've described. First day you go into HR to do your W2, set up insurance, 401K, etc and then you are also handed a surprise non complete. Don't want to sign it? No job.
If it was part of the employment contract you'd be aware of it during the negotiations. Since you haven't even seen the paperwork until this point, how could you have proper consideration for it rolled up in the employment agreement? Why is it even a separate document if that is the case?
And every single employment contract I have signed had a non-compete that was not mentioned during negotiation, and in every single case the non-competes could not be negotiated away either — that does not mean they have no consideration.
> Since you haven't even seen the paperwork until this point, how could you have proper consideration for it rolled up in the employment agreement?
You are using the word consideration in two different senses (i.e. equivocating in the technical sense) [1][2]. A contract must have consideration, but the consideration it requires is consideration in the sense of "A payment or other recompense for something done" not "The thought process of considering, of taking multiple or specified factors into account (with of being the main corresponding adposition)".
If you want consideration in the second sense here, just refuse to sign the clause until you have sufficiently considered it. But if you do sign it, it does not mean it's without consideration in the first sense here.
> refuse to sign the clause until you have sufficiently considered
Sure, but you just told me to quit my job and sent me an offer letter with your terms and "forgot" that not working for X years unpaid after I leave is one of them. In fact you probably did the opposite, you called it "at will" when it clearly isn't, for me at least.
Perhaps you don't sign and sue for promissory estoppel? Wouldn't it be simpler for employers to just define this sort of thing at the start instead of being sneaky about it?
Okay, problem solved then. You don't have a non-compete clause because it won't hold up anywhere.
Still has no bearing whether your contract and its clauses have consideration.
> Perhaps you don't sign and sue for promissory estoppel?
Sure. Good luck.
Hell that 'employment contract' is at will 99% of the time, any party can end it at point for any reason, but that doesn't apply to the implied non-compete portion signed after employment? What?
It's nonsense all the way down.
If you sign a non-compete clause outside the context of employment, and there is no consideration for it, i.e. no continued employment or any other consideration, it's without consideration.
Good luck with the novel legal theories in court, but I don't think courts are too fond of equivocation.
Either way: Honest people would tell you the terms and conditions like that before asking about your price. Even if it's legal, its dishonest. "Whoops we accidently made as much duress as possible for you to sign our contract that we are just revealing now."
It's not a judge's job to do that. The plaintiff will have to make the case.
Why is that 95% of the times I see something get stopped or overturned, it is from a court / judge in Texas?
Right, it only reflects the bias of what news we read and has nothing to do with reality.
https://en.wikipedia.org/wiki/Alan_Albright
> Alan D Albright[1][a] (born November 24, 1959)[2] is a United States district judge of the United States District Court for the Western District of Texas. He was formerly a United States magistrate judge of the same court. Albright oversees a significant portion of patent litigation within the United States. In 2021, the United States Court of Appeals for the Federal Circuit repeatedly rebuked him in a string of opinions for failing to transfer cases to more apt jurisdictions. A quarter of all patent lawsuits in the US were once heard by Albright, who has been widely criticized for ignoring binding case law. However, following a docket-stripping order issued by Chief Judge Orlando Garcia, Albright's patent docket has declined precipitously
1) Recency bias, you probably remember more of these cases from Texas right now because that's the subject of this article.
2) The district and appelate courts in the US vary widely in their judicial ideologies, and usually align closely with their local political leanings. In today's political landscape with a democratic administration, it's unsurprising that courts in conservative districts frequently rule against federal agencies. Notably this judge was appointed by Trump, and is citing recent rulings and legal theory from the current radically conservative Supreme Court. Judges in liberal areas are still under some obligation to take precedent into account, so the case may have gone the same way even with a liberal judge, now that the Chevron Doctrine is more or less dead due to the Supreme Court. But liberal judges still often diverge from the legal theory conservative supreme court justices are using today.
3) Judge shopping, ( https://en.wikipedia.org/wiki/Forum_shopping#United_States ) the case was intentionally filed in a district that is known for conservative judges that are friendly to corporations, were appointed by Trump, and align closely to the supreme court's legal ideology. The Northern District of Texas were this case was decided is a common choice for such shopping, especially because they explicitly ignore policy guidelines (that are sadly nonbinding) to prevent judge shopping.
It was unclear which one let the internet traffic be treated equally, depending on the publication or the phase of its existence
More discussion:
Even then, it wouldn’t hold in intrastate cases since the Commerce clause doesn’t provide for that.
FTC says “[..] it is an unfair method of competition—and therefore a violation of section 5” in their rule.
Indeed, the act gives them the ability to regulate unfair practices, but it’s not clear that this is unfair. Is it unfair if I get paid a good salary in return for not working for competitors? If they pay me for the years I can’t work after resigning, I would very much say no. If they don’t pay me for those years, I would say it could be seen as being unfair. But the rule is a blanket ban on all noncompetes essentially, even for senior executives! (Unless I’m reading it wrong.)
I’m for banning noncompetes, but I don’t think you can reasonably argue that the FTC has this ability.
I do think they could ban the subset that are clearly unfair without any issues FWIW, and I do hope they switch to this direction.