Say Goodbye to Non-Compete Clauses - For Now
The Federal Trade Commission issued the following statement.
kingfish1935.blogspot.com
So unlimited transfers now in the business world ?
- Thread starter thatsbaseball
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kingfish1935.blogspot.com
In right to work states it was weak anyways.
It's been needed in most jobs. Some places fast food workers can't even quit Hardees and go to Wendy's. That is ridiculous. I can see the need for top executives which they left in place. Unfortunately, it will probably be challenged and struck down.Say Goodbye to Non-Compete Clauses - For Now
The Federal Trade Commission issued the following statement.
I'm not sure of the particular legalities in this instance, but government agencies promulgate rules all the time. Administrative law.
I can think of very limited times where a non-compete could be needed, but by and large getting rid of them is a great thing.
The FTC is likely over stepping it's authority, particularly considering the current SCOTUS.
But I think non competes are generally a bad idea, anyway. They are barely even enforceable in most states, courts do not like them at all. They are harmful to low wage earners, though, since they can't afford to challenge them and will likely just obey them.
Employers can still use NDAs and trade secret laws to prevent important employees from stealing their valuable information like customer contacts or manufacturing procedures.
But I think non competes are generally a bad idea, anyway. They are barely even enforceable in most states, courts do not like them at all. They are harmful to low wage earners, though, since they can't afford to challenge them and will likely just obey them.
Employers can still use NDAs and trade secret laws to prevent important employees from stealing their valuable information like customer contacts or manufacturing procedures.
They are fine if there's a contract where both sides make time based commitments that require compensation or a sit out period if broken. Contracts are contracts.
Outside of that it's usually employers trying to throw their weight around because they can. That needs to be reigned in.
Outside of that it's usually employers trying to throw their weight around because they can. That needs to be reigned in.
I had a prospective employee a year or so ago who had a non-compete. She had training in a specific, completely unrelated field. This thing was so broad, it basically said she couldn’t take any job within something like 100 miles of Starkville or she would have to pay back thousands of dollars for training.
She said all the employees had them and they never tried to enforce it, but even still it kept her in a job she wanted to leave.
She said all the employees had them and they never tried to enforce it, but even still it kept her in a job she wanted to leave.
The authority was explained literally in the first line of the rule. Con propaganda has gotten real lazy of late.
SUMMARY: Pursuant to sections 5 and 6(g) of the Federal Trade Commission Act (“FTC
Act”), the Federal Trade Commission (“Commission”) is issuing the Non-Compete Clause Rule
(“the final rule”). The final rule provides that it is an unfair method of competition—and
therefore a violation of section 5—for persons to, among other things, enter into non-compete
clauses (“non-competes”) with workers on or after the final rule’s effective date.
I have interviewed 3-4 times with companies that would have wanted me to sign a non compete. That ended the process immediately each time as they were each trying to poach me from a competitor.. Hypocrites they were... For what it's worth, they were all smaller outfits run by what I can only imagine are extremely micromanaging owners that operate out of a fear culture.
17 off jabronis.
Non solicitations or non disclosures protect a company's proprietary information and business interests... Non competes (excluding when a business is sold/acquired) try to tether employees to what many times are slow sinking ships.
This is a good rule and I hope it holds up in court... Most of the time those non competes wouldn't hold up in court anyway, it's just the fear of litigation that keeps people from challenging it.
17 off jabronis.
Non solicitations or non disclosures protect a company's proprietary information and business interests... Non competes (excluding when a business is sold/acquired) try to tether employees to what many times are slow sinking ships.
This is a good rule and I hope it holds up in court... Most of the time those non competes wouldn't hold up in court anyway, it's just the fear of litigation that keeps people from challenging it.
I doubt it. Courts everywhere, both conservative and liberal, are going to be very hesitant to enforce unfair non-compete agreements.
Hell yes non-competes should go away. Let people work where they want. If a business spent time and money training someone and they dont want to lose the investment they made in that employee, then pay em and treat em well enough to stay.
You can still require employees to agree to not use any proprietary information if they leave the company.
I had a non-compete at my old job and even though I was going into an entirely different field of work, I had to agree to not compete against my old company with regard to a couple dozen customers. I didnt work with most of them and my new job wasnt even in account management/sales.
I pushed back and asked that 3 random customers be removed from the list, just to 17 with the GM I reported to.
Anyways, this should happen if for no other reason than we should see how everything shakes out over the next 15 years.
Does it create financial mobility for all or even some groups?
Does it increase/decrease wages?
Does it increase/decrease product and service costs?
...or does it really not change anything significantly enough to declare it 'good' or 'bad', and therefore it just stays in place because contrary to the Chamber of Commerce's claims, the sky didnt fall.
You can still require employees to agree to not use any proprietary information if they leave the company.
I had a non-compete at my old job and even though I was going into an entirely different field of work, I had to agree to not compete against my old company with regard to a couple dozen customers. I didnt work with most of them and my new job wasnt even in account management/sales.
I pushed back and asked that 3 random customers be removed from the list, just to 17 with the GM I reported to.
Anyways, this should happen if for no other reason than we should see how everything shakes out over the next 15 years.
Does it create financial mobility for all or even some groups?
Does it increase/decrease wages?
Does it increase/decrease product and service costs?
...or does it really not change anything significantly enough to declare it 'good' or 'bad', and therefore it just stays in place because contrary to the Chamber of Commerce's claims, the sky didnt fall.
That doesn’t explain the authority. And seems questionable just with regular usage of those terms although certainly there is an argument. Pretty expansive interpretation of their authority though.
I hope noncompetes go away as the legitimate needs for them are so small minuscule compared to the cases in which they’re abused, but I’d ideally like for them to be done away with while upholding the rule of law. Of all the abuses of power by federal agencies, I’d certainly rather the rule stay unless any case law overturning it really constrains other federal agencies in a major way.
Under this Act, the Commission is empowered, among other things, to (a) prevent unfair methods of competition, and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; (c) prescribe trade regulation rules defining with specificity acts or practices that are unfair or deceptive, and establishing requirements designed to prevent such acts or practices; (d) conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce; and (e) make reports and legislative recommendations to Congress.[7]
CA doesn't have them so you could just study that and draw some conclusions.
There are pros and cons depending on which lens you are looking through. In sales, you basically have to re-recruit your team every year and/or offer overpriced guarantees....sounds a lot like NIL and portal *****
Not quite. The civil courts will adjudicate a NCAs if a complaint is filed. The operative word is "unfair". The courts will determine judgement taking into account fairness and adverse effect on competition and the individual's right to work. Most NCAs are usually mediated and settled outside of court. Probably not to many cases involve fast food workers unless there are substantial adverse circumstances.
I've never had a non-compete clause enforced in any case I've worked on involving one (which is only a handful, but still...) They are always interpreted extremely narrowly, and have to be limited in time and geographic scope.
Like I said, the problem is most employees and potential new employers would rather not spend the money fighting them.
I've had some high profile radio personalities come to me for advice, and they all decided to take a 6 month vacation rather than pay me to fight their non-compete clause.
My wife is a Healthcare recruiter and the company she left enforced the non compete on recruiting she didn't do but the company did. She works for a company doing something they don't even recruit but they were total dickbags about it.
Yeah, they made an argument. That doesn't mean it's correct. This will head to the Supreme Court for sure.
Congress clearly delegated them the authority. And on top of that, Congress has addressed the possibility of "rouge" rules and created a specific process for Congress to review and rescind them. Pretty hard to squint hard enough to rule against that...but yes with this SC anything can happen, especially when corporate interests are affected (literally the only undefeated interest at the SC).
It mostly depends on where the non-compete is written or what state law will prevail. I found out the hard way that the state of Kentucky upholds them to the full extent that they are written. The state has even enforced a company's territory as global in another case.
When I was looking to leave a past job, I had two attorneys and one former judge look at my non-compete and say it would never be enforced if I left on good terms. The problem was none of them had ever seen a case where KY law ruled. After 4 month of being unemployed and tens of thousands of dollars in attorney fees later, I found out the extent of KY law even though the trail was in TN. I settled with my former employer by finding a job that was not with a direct competitor and was released from the lawsuit but the company that initially hired me had to pay close to 100 grad in damages.
There are other people who do things like this for a living that say it's clearly NOT been delegated. I believe them before I do you, BUT.....even they say this is headed to the SC. Like I said, I can see both sides here. My industry has them a lot. Two of my good friends got completely hosed by NOT including one in contracts for people that worked for them. I also have friends that have been hosed by them the other way. It's a two way street.
They are definitely enforced in the furniture mfg and sales
I’ve seen it to many times.
Person leaves company to work for a competitor.
1st company gets an injunction and said employees are out of job
Yes, there are indeed people who do rightie propaganda for a living. Lots of them. And yes, you have made clear that you believe them before me, facts, reason, history, and...well anything.
What kind of market-based society wants competition? That sounds like capitalism and who wants that?***
I’m all for non competes. If you spend the time and money to train someone they shouldn’t be able to up and leave to work for a competitor.
Assistant coaches shouldn't be able to become head coaches or assistant coaches somewhere else without sitting out for some extended period.
In my first real job I had a one year noncompete that basically said I couldn’t work anywhere else in the state of Mississippi in that industry. I changed industries when I took my next job so it didn’t really matter in the end but I would’ve probably cast a wider net during my search if I wasn’t a little bit concerned about the non compete. Haven’t had that with any subsequent jobs though.
Someone once asked me how I keep employees and convince them to work overtime. I replied, “I, uhh….pay them”.
A lot of Americans hate socialism. That is they hate the word "socialism" but actually like a lot of ideas and policies that come out of socialist movements. Many also say they love the free market but then want all sorts of restrictions and regulations on free market competition.
It's pretty simple really.
As an employee I love the idea of being a free agent any time I choose. As a hiring manager that trains, develops, plans and tries to hit team objectives with the team I have built the idea of unfettered free agency can be a nightmare and pose huge risk to the team and company.
Before I hear all this crap about taking care of employees and they won't leave please understand and acknowledge that someone is always out there who can outbid you....period. In fact, it's a viable strategy that we currently use even with non-competes in place but it's expensive and I bet you can't guess where we make up our costs****
"Hiring managers" are no different than gubment bureaucrats. You are either a real decision maker or a grunt.
Let's be clear, if you are hiring and training people for their next job you are probably just a fatter pig working at the sausage factory.. take your slop and get out before you get slaughtered too.
Signed,
Free range former pig, that's now looking to hire my own piglets.
I hear you, and I’ve been pissed about people leaving before, but they shouldn’t be locked into staying with their employer. If they are worth training, they should be worth paying enough to keep them from looking around. Sometimes, people just think the grass is greener everywhere else. Treat people better than other employers, and let them go if they still want gone. Do the first part, and you won’t have too much turnover.
It will be interesting to see the long-term effects if this rule holds up.
If an employer truly values non-competes and that tool is taken away, then they'll address their perceived risk some other way. It might be that they spend less time and money on training. Or they might offer lower salaries or hire fewer people.
Sure, they could also pay more, as some in this thread suggest, but that doesn't seem rational. If you're worth $200k per year to me with low risk that you leave for a competitor, then it's hard to see how you're worth more to me if that risk is increased.
One of my favorite Thomas Sowell quotes is "There are no solutions, only trade-offs." Some who are cheering this rule might not like the trade-off that results from it.
If an employer truly values non-competes and that tool is taken away, then they'll address their perceived risk some other way. It might be that they spend less time and money on training. Or they might offer lower salaries or hire fewer people.
Sure, they could also pay more, as some in this thread suggest, but that doesn't seem rational. If you're worth $200k per year to me with low risk that you leave for a competitor, then it's hard to see how you're worth more to me if that risk is increased.
One of my favorite Thomas Sowell quotes is "There are no solutions, only trade-offs." Some who are cheering this rule might not like the trade-off that results from it.
At least I didn't call someone an anti-semite just because they don't agree with me.
As I've said before, and this is over-simplistic, but corporate profit can be defined as the sum total of how much they've underpaid their employees. Corps will fight this tooth and nail, and they'll win via corruption, not the merits.
That is what the Man wants you to think. I would wipe my *** with a non-compete clause or piss on it like in Major League.
Free markets can get expensive but ultimately balance over time and the strongest/best businesses will win - as well as the consumer. This applies even to competition for and training of humans.I get that It sucks (been burned many times myself) when they bail after an investment of dollars and time but how many investments are risk free?
Also probably no coincidence that retention has declined over the years with the shift from pension to 401k and the decline in the quality of health insurance benefits. Pensions/good health plans are more likely to provide those "golden handcuffs" and keep folks around vs current state of benefits - which provide little financial incentive to stick around beyond salary.
