WP: FTC bans noncompete agreements for workers

[PokerPacker]

https://www.washingtonpost.com/business/2024/04/23/ftc-noncompete-agreements/
 

Quote

The FTC voted 3 to 2 Tuesday to issue the rule it proposed more than a year ago. The new rule makes it illegal for employers to include the agreements in employment contracts and requires companies with active noncompete agreements to inform workers that they are void. The agency received more than 26,000 comments about the rule after it was proposed some 16 months ago. The rule will take effect after 180 days, although business groups have promised to challenge the rule in court, which could delay its implementation.

 

[PleaseBlitz]

Great for workers, not so good for employers.  This is going to be litigated from hell to breakfast, and I have heard that the US Chamber of Commerce has hired not one but two of the heavy hitter litigation firms to fight this.  

[Corcaigh]

California does not permit non-competes and it’s hard to argue that business operation in that state has suffered as a consequence.

 

Too often non-competes are used to reduce the risk of former employees disclosing commercially sensitive information or IP. The threat of legal action on this against the former employee and the new employer should be enough.

 

And non-competes are often not worth anything because they are often are signed some time after employment starts, and if you are going to change employment conditions you’re gonna need some consideration of value. As no new ‘consideration’ is typically provided, it makes them unenforceable anyway.

[Spaceman Spiff]

A lot of employers are going to be upset about this.  But whatever.  I've always felt that if an employer is going to make a candidate sign one of these...well, that says a lot about the employer.  Doesn't always bring the warm and fuzzies and trust to a new employee when wrapping up the interview process and making an offer.  

 

 

[Corcaigh]

10 minutes ago, Spaceman Spiff said:

A lot of employers are going to be upset about this.  But whatever.  I've always felt that if an employer is going to make a candidate sign one of these...well, that says a lot about the employer.  Doesn't always bring the warm and fuzzies and trust to a new employee when wrapping up the interview process and making an offer.  

 

 

Yeah, the idea that by accepting a job offer that you are essentially locking yourself out of the industry as a consequence is a ridiculous ask of a talented potential employee. 

[PokerPacker]

Here's a hint about trade secrets: If all of your employees know the trade secret, it's not a secret.

[CousinsCowgirl84]

*communism intensifies*
 

🤡

[Corcaigh]

31 minutes ago, PokerPacker said:

Here's a hint about trade secrets: If all of your employees know the trade secret, it's not a secret.

True, but there is a lot of data that is highly sensitive in enterprise software for example, and is often only known by specific roles … 
 

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