FTC bans noncompete agreements, making it easier for workers to quit. Here's what to know.

CBS News ^ | 4/23/24 | Kate Gibson

[CFW]

Federal regulators on Tuesday enacted a nationwide ban on new noncompete agreements, which keep millions of Americans — from minimum-wage earners to CEOs — from changing jobs within their industries.

The Federal Trade Commission on Tuesday afternoon voted 3-to-2 approve the new rule, which will ban noncompetes for all workers when the regulations take effect in 120 days. For senior executives, existing noncompetes can remain in force. For all other employees, existing noncompetes are not enforceable.

The FTC heard from thousands of people who said they had been harmed by noncompetes, illustrating how the agreements are "robbing people of their economic liberty," FTC Chair Lina Khan said.

The FTC commissioners voted along party lines, with its two Republicans arguing the agency lacked the jurisdiction to enact the rule and that such moves should be made in Congress.

[CFW]

FTC bans noncompete agreements, making it easier for workers to quit.

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It's also going to make it harder for them to be hired.

[Jonty30]

The tech companies are just going to privately collude.

[ComputerGuy]

The FTC has exceeded its constitutional authority. If it has any, that is.

[wildcard_redneck]

Noncompete agreements are another form of slavery. I’m glad they’re going away.

[MMusson]

All 3 of the statements above might be true at the same time.

[aMorePerfectUnion]

Many were unreasonable.

I sold a biz and the non-compete they initially asked me to sign included all North America, Central America, and the Caribbean. I laughed and said no.

[discostu]

Might as well get rid of them. When they go to court non-competes always lose. They’re basically meaningless.

[thegagline]

The FTC has exceeded its constitutional authority. If it has any, that is.

I hope that you are correct. It is unfortunate that the Contracts Clause, Article 1, Section 10, does not apply to the federal government.

[Red Badger]

They are unenforceable anyway..................

[alancarp]

"It's also going to make it harder for them to be hired."

For people with 'knowledge', it's likely to ignite a poaching frenzy... which is why the non-competes exist in the first place.

[NohSpinZone]

Another regulatory overreach. This administration just loves getting sued.

[alancarp]

...and to that end, if non-competes truly end up going away, expect them to be replaced by NDA’s to protect intellectual property.

[Freest Republican]

They’re like the exculpatory clauses in garages saying you’re responsible for your personal possessions left inside your vehicle. They’re largely not reality.

[13foxtrot]

>>>>
They are unenforceable anyway..................
<<<<

Depends on the State. Generally they are enforceable unless there are explicit statutes barring their enforcement as in California.

[13foxtrot]

>>>>
Might as well get rid of them. When they go to court non-competes always lose. They’re basically meaningless.
<<<<

Depends on the State. Plenty of NCs stand up in court. That is the reason for this new rule. Too many hair-dressers and other low level workers getting sued when they try to change jobs.

[grey_whiskers]

All 3 of the statements above might be true at the same time.

You win the thread!

[T.B. Yoits]

A non-compete agreement, without compensation, is slavery.
A non-compete agreement, with compensation, is simply a contract.

[DesertRhino]

Glad to see this.

[discostu]

Maybe they can’t afford good lawyers. Up in the finance level I live in (software) it’s pretty much doctrine, they never hold up, sign em, ignore em, take whatever job you want. Our company was having a problem for a while that our re-sellers were poaching our support people and I even asked one of our VPs “why aren’t we putting anti-poaching clauses (basically the mirror of NCs) in our contracts?” And he said “they never stand up, they’re a waste of time”.

[Celtic Conservative]

Good point.

CC