In the United States, about 30 million people are subject to noncompete clauses, which "block people from working for a competing employer, or starting a competing business, after their employment ends." According to the Federal Trade Commission (FTC), noncompete clauses "restrict workers from moving freely" and give employers "the power to suppress wages and avoid having to compete to attract workers." Overall, the FTC estimates that noncompete clauses reduce worker earnings by
Wow. I'm still wrapping my head around the idea that large companies would use a tool meant to stifle unfair though temporary advantages from top executives changing companies, to stifle workers ability, while making near minimum wage, to acquire new employment. In the first case, it makes sense.
The top executives are amply compensated, have options and can merely wait out the non-competition period should they choose to do so, but an hourly worker living from hand to mouth?That's not limiting competition from them. It's limiting their ability to eat!
Once again, the US Chamber of Commerce shows its true, disgusting colors. "Non-compete fosters competition"? They don't even TRY to sound intelligent. Good for Lina Kahn. She and Katie Porter are two of my heroes in our government.
I presume,Judd, that since the FTC issued the rule last week, it has gone through the usual review and comment process to which new rules are subject. Is there any action you would like us as readers to take in support of this rule? Anyone we should write, call etc. Thanks, Sarah
This is big. This administration is trying to promote the rights of labor to be part of the so called “free market”. Corporate America really does everything it can to prevent free markets in their own sphere and doesn’t want labor to be “free” in labor’s sphere. Corporations need government regulation on so many fronts and this is just another example of how the freedom to compete is stymied. Everything about regulation creates a “ burden” ----so what. If the regulation of corporations creates “undue burden” ------so what. If their costs go up and profits take a hit------so what. That is not an “undue burden”.Adjust your prices to reflect the true costs of doing business. Corporations have shifted environmental and labor costs away from themselves and onto the very government whose “undue influence” they decry. I digress. Sorry. The idea that a corporation somehow suffers if it doesn’t have non compete clauses to prevent $12 an hour workers from taking the same job for $15 an hour, is nonsense and basically pure greed at the expense of workers. A $12 an hour worker must often rely on government (yes I said government) subsidies to survive
Non-compete rules can be very punitive, both mentally and financially! As a physician working under a contract with a non-compete plus an age limit, I was forced to fight the non-compete which cost me 10’s of thousands of dollars. I won but the damage to my health and wealth was substantial and the medical group never so much as said they were sorry for putting me through such agony! It is a very lonely fight! So much for physician wellness programs!
Once again demonstrating that everyone else has to pay to satisfy corporate greed.
I’m blown away and am now convinced I live in a bubble. I’ve been subject to non-competes, or signed non-competes, for every position I’ve had for at least 25 years. I’m not a top executive by any measure.
The non-competes I’ve signed have had these mandates in effect for 1-2 years post-employment: 1) don’t personally poach their people to join me and 2) don’t poach or influence clients with whom I’ve worked. Applicability across all termination reasons is the only aspect I’ve considered unfair. If I quit, was laid off, my position was eliminated or I was termed for cause, the non-compete was applicable equally. I think non-competes should be applicable to voluntary departures and cause.
The non-competes I’ve been subject to pertain to potential employers; for example, a company that had a professional services contract with my employer agreed they wouldn’t poach during the contract term, so they couldn’t hire me.
Non-competes have some value, but I believe they should be standardized and published, i.e. job A is subject to non-compete category 1, so everyone has clarity from the start.
I had this happen to me, but it was a year long. I think the bigger the business the more apt it is to happen and often gets thrown in with the severance package. Don't know if that is legal or not, but it is done. If the proponents continue to have non competes after this ruling, you can bet the devil will be in the severance pay wordsmithing details.
Corporations > Real People. That is what 45 was trying to do and he got his way packing the Supreme Court. I hope Ms. Khan is successful in her endeavors. Great piece.
Judd, Thank you for reporting this very important development. People need to know about this but will never find out throw standard news.
I had no idea non-competes were ever applied to lower wage workers. The audacity!
In China, a company can force an employee that is leaving to sign a noncompete agreement of up to two years when the employee leaves, but the employer must pay the employee 50% of their salary for the duration of the agreement. That limits use of the agreements to only the most critical employees.
Wow! This is a just a big WOW. Thanks for writing about it. Unfortunately, even the ones who care about this information are tired of reading anything, tired of having their senses and emotions over-loaded by all the egregious things that are going on to keep the little people down. But this statement I mean, even if I share and post, no one will read it. But, aha! Wow may not get big numbers when we share, but if even one person climbs on board, it's a start. Let's all keep sharing, folks!
Any possibility of having the US Chamber of Commerce designated as a terrorist organization?
Make no mistake, those who use noncompete clauses don't just merely want to employ you; they want to own you by running your life after their company is no longer paying for your time and labor.
I recently read an article about this which compared the ability of the FTC to use its statutory regulation in labor law in this instance to the FAA making use of its own similar statutory regulations to impose fines on airlines for their many recent failures in scheduling, selling fares, and cancelling flights. https://prospect.org/infrastructure/transportation/ftc-noncompete-airline-flight-cancellation-buttigieg/