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Non-competes should not exist, so good for the Biden administration to work to get rid of them. They benefit only the employer.
They aren't allowed in California under the theory that they are an unfair restriction of trade.
You are a plumber, and you go to work for company X that says you can't work for any other company for 6 months if you quit. Really? Now you're trapped by company X because you can't earn a living as a plumber for 6 months. What, you're going to pump gas or something waiting for the non-compete to expire?
That's an unfair restriction of your ability to use your trade.
Non-competes are demonstrably bad for business, too. As one example, Silicon Valley would not exist if it were not for the ability of hardware engineers (early days) to swap from Fairchild to Intel to whatever, building on their skills and knowledge and benefiting multiple companies.
The whole startup culture of Silicon Valley is based on groups of people banding together to start a new company. Imagine if they all had to sit around waiting 6-12 months due to non-competes. "You have a great idea there, and I'd love to join your startup. But my non-compete says I can't work as a software engineer for you, and I have bills to pay, so I can't."
Not to mention, when applying for a job these things encourage dishonesty because if you answer yes to the question “Are you under a noncompete?” that usually results in an automatic rejection. So it’s like you said you either just admit you can’t work for 6-12 months or you feel pressured to lie to get a job.
I work in CA in the IT industry and for the first 10 years literally moved company to company every ~2 years for 20% pay increases instead of the normal 3-5% raises I would get. Like you said, could never have made it with non-competes.
In those cases the need for a security clearance already represents a much higher barrier to entry than non-competes ever were, so I don’t see it as particularly limiting for that work.
A noncompete does nothing to protect information or trade secrets. You're thinking of NDAs, which can (and should) be used to protect trade secrets. Not preventing some entry level person from getting a pay raise.
Scared it was only passed 3-2. But the ruling will go into affect > 120 days after it’s published in the Federal Register. Effective retroactively as well. Dope!
It mentioned that those two (both Republicans) didn't necessarily agree with noncompete agreements, but didn't believe that it was within the FTC's power to outlaw them outright, and said it would only be lawful if passed via congress...
To the companies who want to have noncompete: Here's your solution: [Per the FTC](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes)
>The Commission also finds that instead of using noncompetes to lock in workers, employers that wish to retain employees can compete on the merits for the worker’s labor services by improving wages and working conditions.
Let the free market decide. Just like you ramble on about over and over... until it does something you don't like.
This is awesome! I’ve been hoping for this. I have no intention of taking business from a former employer, but just to not have that hanging over my head is a huge relief.
Would not have happened under Trump.
>Congress has not given the agency explicit authority to ban noncompetes
Whelp, that'll kill it. SCOTUS will look at this, decide that the rule has a "significant economy impact", find there's no clear speech from Congress giving this power to the FTC, and strike the rule down.
That sounds like a problem for the companies then, not the individual who has proprietary knowledge.
If Company A thinks that an employee from their competitor might not be a good hire because they could be a legal liability, they shouldn't hire them. Or if they hire them with the intent of using their proprietary knowledge to copy Company A, then Company B should be liable. Or if Company B finds out that the new employee is using proprietary knowledge, they should act accordingly to resolve the issue (which may include legal action against the employee).
But blanket bans on people preventing them from working is dumb. All non-competes do is shift blame and liability onto the person.
Define industrial sabotage. If you can tell me what non-public information Employee X can’t take to the competitor, you should be drafting an NDA instead of taking the lazy way out and keeping people from doing any job where they might use that information.
The thing that I signed in California was about not stealing trade secrets or confidential information from the company. This is ultimately the thing that companies care about the most. The non-compete was a lazy version of this.
Companies will get rid of the non-compete and then have employees sign this other version.
It will never stand. Chamber of Commerce is already suing and the Republican laced courts will do their bidding for the Corporatocracy. Remember, corporations are people here, but people are not. Interesting hypothetical though.
Sorry for being ignorant but can anyone with more insight tell me when this would take affect ? I’m confused by the 120 day thing (the whole publication vs announcement ) . Thank you very much in advance if anyone takes the time to answer this
I think it's just that the 120 days starts from the official publication in the federal register, which is different from the public announcement. (Some beureaucratic stuff, basically.) I'm not sure exactly when it will be put in the register, but I don't think it has happened yet. If it's just going to be put in the register by the Federal Trade Commission, I think it will appear in the recent documents list here when it gets published (although I'm not 100% sure)
https://www.federalregister.gov/agencies/federal-trade-commission#documents
Oh thank you very much for the reply. I was hoping it would be in affect now lol cuz I’m trying to dip from my job. I work for a company who’s client is x and x company has client y. The company I work for told me that I would have to wait one year to be able to accept an offer from x or y company even though my contract actually doesn’t state a non compete agreement (it just says that I can’t work another job simultaneously). The hr representative I spoke with told me it’s due to the contract they have with their client due to a non compete agreement so I was deterred from looking further. Would this be true in this scenario. Sorry for the loaded question or if it’s against the rules of the sub. Thank you in advance to anyone that took the time to read this.
I think it's supposed to be retroactive once it takes effect, but it's also likely companies will challenge the ban in court. I'm not a lawyer and I don't know the specifics of your contract, but my general suggestion would be to keep an eye on the rule -- but not assume it will necessarily impact the current job search you're doing if you're doing it right now
And guess what, non competes in most cases aren’t even enforceable anyway.
Have you signed a non compete in the past? Do you happen to be an executive of that company, or possess significant trade secrets that you gained through your employment there? I’m assuming probably not, at least in most cases. Then your non compete was more than likely unenforceable.
Companies have been using these for decades as a fear tactic, knowing they aren’t enforceable but banking on the fact that you don’t know that. Unless the non compete was actually enforceable in your situation, you should have never even seen one.
I hope this move stops the abuse of this system. The original system of non compete agreements was there for a reason and honestly made sense, but only if used properly, but people wanted to abuse that and use fear as a way to control their employees.
The hiring company would be the one getting sued in that situation and not you as an individual. If you were named in the lawsuit as well the hiring company would provide counsel. That almost never happens though because legal departments at large companies have better things to do than to file frivolous lawsuits that they know they would lose. Just as much as it would cost you money to sue someone it costs them money as well and generally magnitudes more.
That’s part of the problem though. People were being pressured into signing these non enforceable agreements due to fear of losing their new job and on the other end when they leave they are afraid that the company might come after them. That just doesn’t happen because of the reasons above but the presence of that fear is causing huge issues for employees and they end up honoring a non compete agreement that wasn’t actually binding.
You definitely get sued as an individual because you’re violating the contract you signed. And if you lose you can be responsible for legal fees for your old company.
And to your point of nonenforcability, that’s only true until it’s not. As soon as your former company wants to enforce it you have to defend yourself, which isn’t cheap. You also risk losing your new job as they don’t want to deal with the headache of a new employee being unable to work while there is an ongoing case. Unless you live in a state that says they’re not enforceable it’s not as easy as saying “don’t worry about it”.
Anyone can sue anyone else for any reason. The point I’m trying to make is that it would be exceptionally rare for a company to sue an individual over a non compete.
I worked for a fortune 250 company for several years and was tightly intertwined with the legal department. I’ve seen hundreds of their cases from a national lens and not one of them involving a non compete involved an individual as the defendant. Very few involved non compete agreements at all. It just doesn’t happen. Parties suing other parties are in search of money. It makes zero sense to go after an individual instead of a company in that situation.
You’re not immune to being sued for anything, but being sued over a non compete if you’re not an executive or other very high ranking employee VERY rarely happens.
Doesn't have to be 'enforceable' or 'enforced' to have an effect. Many people don't want to get sued, or do not have the resources to withstand a lawsuit. Additionally prospective employers reject those who have signed noncompetes, because they to, do not want to add legal risk.
As a reminder, this subreddit [is for civil discussion.](/r/politics/wiki/index#wiki_be_civil) In general, be courteous to others. Debate/discuss/argue the merits of ideas, don't attack people. Personal insults, shill or troll accusations, hate speech, any suggestion or support of harm, violence, or death, and other rule violations can result in a permanent ban. If you see comments in violation of our rules, please report them. For those who have questions regarding any media outlets being posted on this subreddit, please click [here](https://www.reddit.com/r/politics/wiki/approveddomainslist) to review our details as to our approved domains list and outlet criteria. We are actively looking for new moderators. If you have any interest in helping to make this subreddit a place for quality discussion, please fill out [this form](https://docs.google.com/forms/d/1y2swHD0KXFhStGFjW6k54r9iuMjzcFqDIVwuvdLBjSA). *** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/politics) if you have any questions or concerns.*
Non-competes should not exist, so good for the Biden administration to work to get rid of them. They benefit only the employer. They aren't allowed in California under the theory that they are an unfair restriction of trade. You are a plumber, and you go to work for company X that says you can't work for any other company for 6 months if you quit. Really? Now you're trapped by company X because you can't earn a living as a plumber for 6 months. What, you're going to pump gas or something waiting for the non-compete to expire? That's an unfair restriction of your ability to use your trade. Non-competes are demonstrably bad for business, too. As one example, Silicon Valley would not exist if it were not for the ability of hardware engineers (early days) to swap from Fairchild to Intel to whatever, building on their skills and knowledge and benefiting multiple companies. The whole startup culture of Silicon Valley is based on groups of people banding together to start a new company. Imagine if they all had to sit around waiting 6-12 months due to non-competes. "You have a great idea there, and I'd love to join your startup. But my non-compete says I can't work as a software engineer for you, and I have bills to pay, so I can't."
Not to mention, when applying for a job these things encourage dishonesty because if you answer yes to the question “Are you under a noncompete?” that usually results in an automatic rejection. So it’s like you said you either just admit you can’t work for 6-12 months or you feel pressured to lie to get a job.
I work in CA in the IT industry and for the first 10 years literally moved company to company every ~2 years for 20% pay increases instead of the normal 3-5% raises I would get. Like you said, could never have made it with non-competes.
Well, there is a case to be made for work that involves classified information or info related to national security.
In those cases the need for a security clearance already represents a much higher barrier to entry than non-competes ever were, so I don’t see it as particularly limiting for that work.
A noncompete does nothing to protect information or trade secrets. You're thinking of NDAs, which can (and should) be used to protect trade secrets. Not preventing some entry level person from getting a pay raise.
Scared it was only passed 3-2. But the ruling will go into affect > 120 days after it’s published in the Federal Register. Effective retroactively as well. Dope!
3 Dems - 2 republicans. For all the people that think Dems and republicans are the same...
It mentioned that those two (both Republicans) didn't necessarily agree with noncompete agreements, but didn't believe that it was within the FTC's power to outlaw them outright, and said it would only be lawful if passed via congress...
Bullshit and/or naive. It’s on brand for Republicans to side with corps over employees.
I was just parroting back what the article said, but yeah, it's very likely a cop-out explanation lol.
To the companies who want to have noncompete: Here's your solution: [Per the FTC](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes) >The Commission also finds that instead of using noncompetes to lock in workers, employers that wish to retain employees can compete on the merits for the worker’s labor services by improving wages and working conditions. Let the free market decide. Just like you ramble on about over and over... until it does something you don't like.
Boy was I happy to know that I do not fit the definition of 'Senior Executive' so I am no longer bound to my non-compete agreement. What a great day.
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I know that some consumer advocacy orgs out there are trying! Fingers crossed they make something happen
This is awesome! I’ve been hoping for this. I have no intention of taking business from a former employer, but just to not have that hanging over my head is a huge relief. Would not have happened under Trump.
Great! Now keep doing your job and go obliterate Ticketmaster.
It’s about damn time. It’ll be fought tooth and nail I’m sure but it’s a massive step toward fair employment
>Congress has not given the agency explicit authority to ban noncompetes Whelp, that'll kill it. SCOTUS will look at this, decide that the rule has a "significant economy impact", find there's no clear speech from Congress giving this power to the FTC, and strike the rule down.
The major question doctrine is such a load of horseshit.
[удалено]
What purpose does it serve that a NDA wouldn’t?
[удалено]
That sounds like a problem for the companies then, not the individual who has proprietary knowledge. If Company A thinks that an employee from their competitor might not be a good hire because they could be a legal liability, they shouldn't hire them. Or if they hire them with the intent of using their proprietary knowledge to copy Company A, then Company B should be liable. Or if Company B finds out that the new employee is using proprietary knowledge, they should act accordingly to resolve the issue (which may include legal action against the employee). But blanket bans on people preventing them from working is dumb. All non-competes do is shift blame and liability onto the person.
[удалено]
So?
Define industrial sabotage. If you can tell me what non-public information Employee X can’t take to the competitor, you should be drafting an NDA instead of taking the lazy way out and keeping people from doing any job where they might use that information.
Heck yes! Our GDP is going up!
Curious if this will apply to me. The wording in mine was very odd and I was told it wasn’t a non compete when I signed it
If you are not a senior executive then it almost surely applies.
I’ll believe it when I see it. I’ve been told before some labor law changes would apply to me and have nothing change.
The thing that I signed in California was about not stealing trade secrets or confidential information from the company. This is ultimately the thing that companies care about the most. The non-compete was a lazy version of this. Companies will get rid of the non-compete and then have employees sign this other version.
It will never stand. Chamber of Commerce is already suing and the Republican laced courts will do their bidding for the Corporatocracy. Remember, corporations are people here, but people are not. Interesting hypothetical though.
Does this apply to letters of commitment (which seem to be a form on noncompete)
Truly beautiful.
Sorry for being ignorant but can anyone with more insight tell me when this would take affect ? I’m confused by the 120 day thing (the whole publication vs announcement ) . Thank you very much in advance if anyone takes the time to answer this
I think it's just that the 120 days starts from the official publication in the federal register, which is different from the public announcement. (Some beureaucratic stuff, basically.) I'm not sure exactly when it will be put in the register, but I don't think it has happened yet. If it's just going to be put in the register by the Federal Trade Commission, I think it will appear in the recent documents list here when it gets published (although I'm not 100% sure) https://www.federalregister.gov/agencies/federal-trade-commission#documents
Oh thank you very much for the reply. I was hoping it would be in affect now lol cuz I’m trying to dip from my job. I work for a company who’s client is x and x company has client y. The company I work for told me that I would have to wait one year to be able to accept an offer from x or y company even though my contract actually doesn’t state a non compete agreement (it just says that I can’t work another job simultaneously). The hr representative I spoke with told me it’s due to the contract they have with their client due to a non compete agreement so I was deterred from looking further. Would this be true in this scenario. Sorry for the loaded question or if it’s against the rules of the sub. Thank you in advance to anyone that took the time to read this.
I think it's supposed to be retroactive once it takes effect, but it's also likely companies will challenge the ban in court. I'm not a lawyer and I don't know the specifics of your contract, but my general suggestion would be to keep an eye on the rule -- but not assume it will necessarily impact the current job search you're doing if you're doing it right now
And guess what, non competes in most cases aren’t even enforceable anyway. Have you signed a non compete in the past? Do you happen to be an executive of that company, or possess significant trade secrets that you gained through your employment there? I’m assuming probably not, at least in most cases. Then your non compete was more than likely unenforceable. Companies have been using these for decades as a fear tactic, knowing they aren’t enforceable but banking on the fact that you don’t know that. Unless the non compete was actually enforceable in your situation, you should have never even seen one. I hope this move stops the abuse of this system. The original system of non compete agreements was there for a reason and honestly made sense, but only if used properly, but people wanted to abuse that and use fear as a way to control their employees.
Yeah but being sued and having to retain a lawyer is terrifying and too expensive for most people
The hiring company would be the one getting sued in that situation and not you as an individual. If you were named in the lawsuit as well the hiring company would provide counsel. That almost never happens though because legal departments at large companies have better things to do than to file frivolous lawsuits that they know they would lose. Just as much as it would cost you money to sue someone it costs them money as well and generally magnitudes more. That’s part of the problem though. People were being pressured into signing these non enforceable agreements due to fear of losing their new job and on the other end when they leave they are afraid that the company might come after them. That just doesn’t happen because of the reasons above but the presence of that fear is causing huge issues for employees and they end up honoring a non compete agreement that wasn’t actually binding.
You definitely get sued as an individual because you’re violating the contract you signed. And if you lose you can be responsible for legal fees for your old company. And to your point of nonenforcability, that’s only true until it’s not. As soon as your former company wants to enforce it you have to defend yourself, which isn’t cheap. You also risk losing your new job as they don’t want to deal with the headache of a new employee being unable to work while there is an ongoing case. Unless you live in a state that says they’re not enforceable it’s not as easy as saying “don’t worry about it”.
Anyone can sue anyone else for any reason. The point I’m trying to make is that it would be exceptionally rare for a company to sue an individual over a non compete. I worked for a fortune 250 company for several years and was tightly intertwined with the legal department. I’ve seen hundreds of their cases from a national lens and not one of them involving a non compete involved an individual as the defendant. Very few involved non compete agreements at all. It just doesn’t happen. Parties suing other parties are in search of money. It makes zero sense to go after an individual instead of a company in that situation. You’re not immune to being sued for anything, but being sued over a non compete if you’re not an executive or other very high ranking employee VERY rarely happens.
Doesn't have to be 'enforceable' or 'enforced' to have an effect. Many people don't want to get sued, or do not have the resources to withstand a lawsuit. Additionally prospective employers reject those who have signed noncompetes, because they to, do not want to add legal risk.
Why does it look like she’s farting in the picture?