'Noncompete' agreements for most employees would be barred under new federal rule

[GURPS]

The Federal Trade Commission voted Tuesday 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time. According to the FTC, 30 million people — roughly one in five workers — are now subject to such restrictions.

The Biden administration has taken aim at noncompete measures, which are commonly associated with high-level executives at technology and financial companies but in recent years have also ensnared lower-paid workers, such as security guards and sandwich-shop employees. A 2021 study by the Federal Reserve Bank of Minneapolis found that more than one in 10 workers who earn $20 or less an hour are covered by noncompete agreements.

When it proposed the ban in January 2023, FTC officials asserted that noncompete agreements harm workers by reducing their ability to switch jobs for higher pay, a step that often provides most workers with their biggest pay increases. By reducing overall churn in the job market, the agency argued, the measures also disadvantage workers who aren't covered by them because fewer jobs become available as fewer people leave their positions. They can also hurt the economy overall by limiting the ability of other businesses to hire needed employees, the FTC said.

'Noncompete' agreements for most employees would be barred under new federal rule

U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency Tuesday.

bakersfieldnow.com

 

[vraiblonde]

Why would you have a sandwich shop employee sign a NCA? And I'm curious where this is happening. I've never signed a no-compete - I was asked to one time and told them to eff themselves. Even the soulless corp I work for now doesn't have us sign NCA, and that sounds like something that battalion of bean counters and pencil pushers would do.

I think of a NCA to protect the company from an employee who might want to take proprietary information to a competitor or become a competitor themselves. What part of this don't I understand?

 

[Kyle]

Why would you have a sandwich shop employee sign a NCA?

McDonalds has to protect the secret sauce recipe!

 

[vraiblonde]

McDonalds has to protect the secret sauce recipe!

The ice cream maker repair instructions....

 

[CPUSA]

I think of a NCA to protect the company from an employee who might want to take proprietary information to a competitor or become a competitor themselves. What part of this don't I understand?

Not just proprietary information, but also clients.
Most Law Firms require an NCA. I was told that The Shah Group require their Healthcare Providers sign one.
Alot of maid services are now requiring it as well

 

[GURPS]

In more legal news, the Hill ran a story yesterday headlined, “FTC votes to ban noncompete agreements.” Following a year of public comment, the FTC just pulled the plug on all employee noncompete agreements of every kind. Boom.





It’s a fascinating idea, but it won’t hold up. It’s a cynical, election-year dodge to spike the economy a little before the courts predictably strike down the rule change. The FTC voted 3-2 on party lines yesterday to approve its new no-non-compete rule.

But even the commissioners realize the agency has no authority to do that:

While the dissenting commissioners said they did not support noncompete agreements carte blanche, they did not believe the agency had the authority to issue the rule without an express directive from Congress.​

“Beginning with policy puts the cart before the horse,” FTC Commissioner Andrew Ferguson (R) said. “No matter how important, conspicuous and controversial the issue, and no matter how wise the administrative solution, an administrative agency’s power to regulate must always be grounded in the valid grant of authority from Congress. Because we lacked that authority, the final rule is unlawful.”​

As a lawyer who often litigates non-compete agreements, I understand well the arguments on both sides. Employees argue that by definition, non-competes are anticompetitive, and suppress wages by job-locking people. Employers argue they invest a lot of money into training folks and developing employees’ skills, and letting staff in on secret formulas and techniques that would be harmful if competitors ever got ahold of them.

My take is that the law of non-competes is frequently inexplicable and often inefficient. Last year, for example, one of my clients wasted a half million dollars successfully defending a completely spurious set of lawsuits over non-compete agreements linked to some executives they didn’t even want anymore. So it’s not even clear on balance that non-competes are good for employers or employees.

As I said, there’s a 99% chance the FTC’s new rule will soon be stayed pending litigation. But during the short window of time before a federal court predictably stays the rule, employees might be able to quickly switch jobs in spite of their non-competes, or employers might be able to quickly hire people subject to one. I’m not offering legal advice. Get your own legal opinion. I’m only saying.

☕️ STIFF OPPOSITION ☙ Wednesday, April 24, 2024 ☙ C&C NEWS 🦠

The state's first witness stretches out; Ukraine aid passes Senate; defections and disaster plague Proxy War; Biden's newest sanctions war; FTC bans noncompetes; DeSantis slams Congress; lots more.

www.coffeeandcovid.com

 

[LightRoasted]

For your consideration ...

Why would you have a sandwich shop employee sign a NCA? And I'm curious where this is happening. I've never signed a no-compete - I was asked to one time and told them to eff themselves. Even the soulless corp I work for now doesn't have us sign NCA, and that sounds like something that battalion of bean counters and pencil pushers would do.

I think of a NCA to protect the company from an employee who might want to take proprietary information to a competitor or become a competitor themselves. What part of this don't I understand?

When I hear of "non-compete" NCAs, What I hear is that the person cannot start a business to compete directly against the business they currently work. Working for, (as an employee), another 'like' business, is not competing against their previous employer. However, a business can, within the NCA or NDA, demand that one does not divulge sensitive business information; their business plans, customer account information, etc.. If they do disclose to others, or use inside information for personal gain learned/garnered while employed, then legal action can be taken to re-coup any possible lost revenues caused by the past employee's competitive behavior.

 

[BOP]

I always look to see who's for and who's against something. So if the Demonrats are for something (or against), then I know it's bad for America, and bad for Americans, but probably good for politicians.

 

[somdwatch]

McDonalds has to protect the secret sauce recipe!

Isn't that known? I thought Thousand Island salad dressing pretty much tasted the same!

 

[black dog]

McDonalds has to protect the secret sauce recipe!

You mean the sauce they stole from Geno Marchetti's Gino's Giant, in the middle 60's?

 

[HemiHauler]

Much like patents, non-compete agreements stifle innovation and individual freedom & should be eschewed at all costs.

It doesn’t go into effect for 120 days and enforcement will likely be blocked while businesses judge shop file suit.

 

[Kyle]

You mean the sauce they stole from Geno Marchetti's Gino's Giant, in the middle 60's?

Don't know that one. Where was it?

 

[HemiHauler]

Alot of maid services are now requiring it as well

Ah. Sucks you’re not legally allowed to go elsewhere to clean toilets.

 

[CPUSA]

Ah. Sucks you’re not legally allowed to go elsewhere to clean toilets.

Is your "wife" still making wine in the prison toilet?

Since you seemed to have taken a perverted interest in my bathroom activities, Here's a pic of the last turd & flushed...

 

[black dog]

Don't know that one. Where was it?

He was a Player with the Colts back in the day, he and a few others opened Gino's and ended up with KFC franchises in them also. Most were around the Maryland, VA and PA areas to what I remember. I worked at the one, a block down Wisconsin Ave from Old Georgetown Rd in 72-73.
He was a good guy, also got to meet the Colonel twice, when he was doing his tours around America.
Gino invented the Gino Giant in the late 1950's. Most of them turned into Roy Rodgers when Marriott bought out the company owned stores.
The last one that was privately owned closed in the middle 80's and was in Pasadena, Md.

 

[PeoplesElbow]

Why would you have a sandwich shop employee sign a NCA? And I'm curious where this is happening. I've never signed a no-compete - I was asked to one time and told them to eff themselves. Even the soulless corp I work for now doesn't have us sign NCA, and that sounds like something that battalion of bean counters and pencil pushers would do.

I think of a NCA to protect the company from an employee who might want to take proprietary information to a competitor or become a competitor themselves. What part of this don't I understand?

Jimmy Johns does that.