Originally published at: https://boingboing.net/2024/04/24/federal-trade-commission-bans-non-compete-agreements.html
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This should get interesting. The US Chamber of Commerce is the largest lobbying group in the United States.
I wonder how politicians will try to convince their constituents that those draconian agreements somehow help the average American.
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They won’t need to with the current SCOTUS on the job.
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Caveats:
Note that it doesn’t go into effect until 120 days after it’s been recorded in the federal register and there’s a carve out that it doesn’t apply to “senior executives”, where executives are defined as people making over $151k in “policy making positions” which I’m sure some companies (especially Big 4) will try to very broadly apply.
Or, as a friend suggested:
Corporate policy that if your name is in the version history of any policy, you’re a “policy making position”
So, a GitHub commit with your name means you made a policy decision. My feedback is to simply ask HR to reduce your salary to under the money threshold one pay cycle before you quit.
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Without really moving my ugly ol’ butt I managed to collect business cards through four sold-off/bought pharma research companies; each one required that we sign a non-compete agreement (“NCA”). Each contract more nonsensical. The last one stating “Employee cannot accept a position at a comparable corporation for one hundred years within a distance of one hundred miles” …really, it stated that. When we sniggered at that during the signing event, the shiny new CEO smirked and said “yeah, that’ll likely not stand up in court.” so if they knew that… then… why?? [shrug]
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Why? The cruelty, you see, is the point.
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Probably because they know most people are averse to legal confrontation even if they are likely to prevail. Nobody likes having to go to court and hire a lawyer if they can avoid it, so scary legal threats are usually all it takes.
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I’ve never seen a situation where a non-compete agreement wasn’t bullshit, but in one case I read about, it was being applied to literal ditch-diggers working for an oil and gas company. It turns into a “if you don’t work for us, you can’t work at all” bludgeon very quickly.
The chamber of commerce can go fuck themselves if they want to keep non-competes around.
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Yeah, the dirty little secret here is that the vast majority of the non-compete agreements banned by the FTC’s new policy are likely not enforceable to begin with. Which should help the FTC if the US Chamber of Commerce goes through with their lawsuit. A non-compete clause for a barista in a coffee shop, no matter how narrowly drafted, is probably not enforceable in court, but most baristas are not likely to have the resources necessary to fight a lawsuit. What the FTC is really doing here is just enacting a rule to enforce well established legal doctrine.
What would be better is if Congress takes this up and enacts a law banning such non-compete clauses. That would be a lot more difficult to challenge in court. Vote blue in November!
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It’s shocking how many times I’ve heard that while negotiating a contract. I’ve never signed a non-compete, but have signed mountains of NDAs, almost universally for items that already exist in the market and technology that is hundreds of years old, but they think they’ve invented (cold brewing the coffee is the secret, you see!!!). Most of those prospective companies I never heard from again, possibly because they burned up all of their capital on useless lawyer’s hours.
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The difference between “input” and “decision making” is going to be important. It should be a fairly easy argument that if you don’t have budget authority where the policy matters or cannot change the policy on your own, you aren’t in a “policy making positions”. You may have been consulted or provided input, but you didn’t make the decision.
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Just in case it could stand up in court.
Like a street mugging, it’s all smiles and jokes until it’s not.
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Writing as a UK citizen who has never lived in the US but was once the subject of a non-compete instruction issued by the FTC (long story - but pretty frivolous), all I can say is, it’s about time.
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It’s “Follow the Money” time.
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In BC (& probably all of Canada) non-compete clauses are null and void if they prevent you from making a living. I’ve always figured “sue me if you think you have a case and we can let the court decide who’s right”. I’ve never lost a court case for anything, though I’ve only been there a couple of times.
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