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FTC announces rule banning noncompetes

ftc.gov

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Re: FTC announces rule banning noncompetes

#121

Post by mbreese »

relaxing wrote: post #54
bretthoerner wrote: post #11

My attorney friends tell me that the FTC doesn't really have the ability to do this, since contract law is part of state law. (My poor paraphrasing, not theirs.) I've been surprised I haven't seen this mentioned on social media or in the news. Are my friends wrong, or are people celebrating because this is just a step in the right direction even if it may not do anything yet?

Interstate commerce is broadly recognized to include just about anything.

Where I am, I know people who are under noncompetes that have a geographical clause. You can’t leave to join a competitor within X miles. In my part of the country, that would include at least three states (maybe more), but other locations would include many more.

So, yeah, seems like at least those non-competes impacts interstate commerce.

Re: FTC announces rule banning noncompetes

#122

Post by sanity »

akira2501 wrote: post #100
LeifCarrotson wrote: post #59

Full text of the ruling here: https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule... It's not surprising after thinking about it for a minute, but it did startle me to read that the FTC measures innovation by the number of patents issued. > In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 year…

> I've always thought of that as representing a stifling of innovation. The short lifetime of patents and the requirement that you publish detailed information about the invention significantly mitigates this. If they were measuring innovation by the number of copyrights filed, then I might agree with you.

Depends on the industry, 20 years is a lifetime in software.

Re: FTC announces rule banning noncompetes

#123

Post by jfengel »

arcticbull wrote: post #63
macintux wrote: post #36

Earlier quoted context omitted.

I suspect this won’t survive a challenge in front of the current Supreme Court, unfortunately.

It'll be interesting to see what happens. It does sound like this clearly falls under interstate commerce, so within the scope of Fed action. Is there something that makes you think otherwise? Beyond court composition, that is.

From a purely meta point of view:

This was something passed by a Democratic administration. Therefore Republicans hate it, and since 2/3 of the Supreme Court is Republican, it's likely to be struck down.

The actual reasoning comes later. Something-something-Federalist-Papers-something. I'm sure they'll have no trouble digging up some Founding Father who said something that sounds like banning this, if you squint right.

I know a great many lawyers, of both parties, who have more respect for the Supreme Court than I do. They are more informed and better educated than I am, so you should take my cynicism with a grain of salt. But in my experience, treating the Supreme Court as a partisanship machine yields extremely accurate predictions.

Re: FTC announces rule banning noncompetes

#124

Post by Bostonian »

Banning noncompetes discourages companies from training workers, since they can leave immediately after their training is over. It also impinges on worker freedom. Currently I can apply for jobs with and without noncompetes, and if the job with the noncompete pays substantially more or is more attractive in some other way, I can take it. The FTC rule would deprive me of that choice.

I have been hired to write software to implement investment strategies. My noncompete prevents me from leaving and immediately taking a job at company that invests in the same markets. That is a reasonable way for the company to protect its intellectual property.

Re: FTC announces rule banning noncompetes

#126

Post by 0cf8612b2e1e »

SoftTalker wrote: post #73
chowells wrote: post #8

Earlier quoted context omitted.

Because excesses finally became so ridiculously over the top that it was finally politically viable to address it. Remember, chain restaurants have started using non-competes to ban servers and cooks from moving to another employer. The situation is finally in the eyes of the general public.

That's just absurd. Non-competes should never apply to commodity-skill jobs. I wonder how often they were ever enforced?

Enforcement does not matter. It is the chilling threat an employer can use against someone without options.

If you are flipping burgers for minimum wage and your boss says they can sue you if you leave for a competitor, are you willing to chance it?

Re: FTC announces rule banning noncompetes

#127

Post by Buttons840 »

bretthoerner wrote: post #11

My attorney friends tell me that the FTC doesn't really have the ability to do this, since contract law is part of state law. (My poor paraphrasing, not theirs.) I've been surprised I haven't seen this mentioned on social media or in the news. Are my friends wrong, or are people celebrating because this is just a step in the right direction even if it may not do anything yet?

Ask your attorney friends if a farmer growing food on their own land to feed to their own animals is "interstate commerce", and ask them to explain that to you.

What I'm referring to here is Wickard v Filburn in which the Supreme Court ruled that a farmer growing food on his own land to feed to his own animals was participating in "interstate commerce" and could thus be regulated by the federal government.

This is a big part of why the federal government can control things like which plants you are allowed to grow in your home.

But when the FTC tries to regulate something like non-competes and protect average workers the corporate attorneys come out of the woodwork, "oh no, the federal government can't do that!"

Re: FTC announces rule banning noncompetes

#128

Post by ixwt »

Uvix wrote: post #108
arcticbull wrote: post #63

Earlier quoted context omitted.

It'll be interesting to see what happens. It does sound like this clearly falls under interstate commerce, so within the scope of Fed action. Is there something that makes you think otherwise? Beyond court composition, that is.

That this is coming from the executive branch, not the legislative branch.

And the current Supreme Court is not a huge fan of Chevron Deference, which this certain falls under...

Re: FTC announces rule banning noncompetes

#130

Post by ixwt »

arcticbull wrote: post #119
Uvix wrote: post #108

Earlier quoted context omitted.

That this is coming from the executive branch, not the legislative branch.

Sure, but FTC was authorized by congress (FTC Act 1914) to "prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce" which seems pretty cut and dried? I may be missing something, this just feels pretty reasonable.

You're missing the fact that the current Supreme Court has been doing everything they can to kill Chevron Deference.
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