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FTC announces rule banning noncompetes

ftc.gov

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Re: FTC announces rule banning noncompetes

#141

Post by jbullock35 »

kevstev wrote: post #43
cjen wrote: post #24

This seems incredibly important. I know non-compete rules personally held me back at a previous tech job. I'm interested to see how this hits finance firms – I know people who were forced to take a year off between jobs (although they were compensated the whole time). Always thought that would be a pretty sweet deal.

I was subject to one as well, but it was just on my base, not total comp, which was not the majority of my compensation. And while my base was fine, it was more or less explicitly stated that this was meant to make it painful for employees to leave and had almost zero to do with any special information the employee had.

I'm not sure that I understand. What does it mean for a noncompete to apply only to base compensation? Is the idea that if you join a competing company within X months of leaving your old company, you need to repay your base salary to the old company?

Re: FTC announces rule banning noncompetes

#142

Post by [deleted] »

mbreese wrote: post #121
relaxing wrote: post #54

Earlier quoted context omitted.

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.

[deleted]

Re: FTC announces rule banning noncompetes

#143

Post by cogman10 »

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.

Interstate commerce would allow congress to make such a law. However, the real question will be if congress gave or intended to give the FTC the authority to perform this action.

This supreme court has been very down on federal powers, so it really would not be surprising if they pulled "the major questions doctrine" to ultimately kill this off.

Re: FTC announces rule banning noncompetes

#144

Post by MiddleEndian »

cjen wrote: post #24

This seems incredibly important. I know non-compete rules personally held me back at a previous tech job. I'm interested to see how this hits finance firms – I know people who were forced to take a year off between jobs (although they were compensated the whole time). Always thought that would be a pretty sweet deal.

>I know people who were forced to take a year off between jobs (although they were compensated the whole time). Always thought that would be a pretty sweet deal.

If a company wants to pay someone not to work for a year, they're free to do that whenever they want. Maybe without noncompetes, they'll have to pay more to make it worth it for the guy being paid to sit around!

Re: FTC announces rule banning noncompetes

#146

Post by CalChris »

nerpderp82 wrote: post #45
timf wrote: post #26

The U.S. Chamber of Commerce is likely to file suit: https://www.uschamber.com/finance/antitrust/chamber-comments...

Total aside, but I think it is ridiculous that CoC larps as a quasi governmental organization. When in actuality it is a Union of Capitalists.

Yes, it was started by Taft as a business 'union' that the government could deal with. Now they're funded primarily by multinationals and so they place the concerns of those large corporations first and well before upstart startups.

Re: FTC announces rule banning noncompetes

#147

Post by unyttigfjelltol »

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?

Your friend may recall that the FTC occasionally acts against "deceptive" conduct in the marketplace. If you read the relevant law, it also can act against "unfair" conduct.[1] Sometimes people forget there are two words there separated by "or".

This would be an example of an "unfair" practice, which mostly are about predation in the context of unequal bargaining position when litigated under "Little FTC Acts"[2]. I don't know offhand whether these similar laws have been used to achieve the same thing state-by-state, but the FTC rule meets the straight face test for sure. So, regardless of what happens next at the Federal level, this is about to become a white-hot area of litigation under state "Little FTC Acts".

[1] https://www.law.cornell.edu/uscode/text/15/57a

[2] https://litigationcommentary.org/2021/06/15/a-fresh-look-at-...

Re: FTC announces rule banning noncompetes

#148

Post by triceratops »

zer00eyz wrote: post #99
macintux wrote: post #36

Earlier quoted context omitted.

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

I am not entirely sure. Without anti compete stealing your competitors staff becomes a valid business strategy. Buy up the competitions best people and cripple them. This favors those with the most capital not the least.

I'd love for my company's competitor to buy me up. Shit let them all go to war for the privilege of employing my ass.

Re: FTC announces rule banning noncompetes

#149

Post by tech_ken »

zer00eyz wrote: post #99
macintux wrote: post #36

Earlier quoted context omitted.

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

I am not entirely sure. Without anti compete stealing your competitors staff becomes a valid business strategy. Buy up the competitions best people and cripple them. This favors those with the most capital not the least.

> This favors those with the most capital not the least.

So does the US Supreme Court lol

More seriously I think the issue is going to be whether it's executive overreach, not whether it's good or bad for a competitive marketplace.

Re: FTC announces rule banning noncompetes

#150

Post by MOARDONGZPLZ »

SoftTalker wrote: post #58
whitej125 wrote: post #39

Does this change a lot for many people? This doesn't mean you can scurry off a just build a competing product/service to your existing employer. You probably also have NDA and/or IP agreements too. > The Commission found that employers have several alternatives to noncompetes that still enable firms to protect their investments without having to enforce a noncompete. > Trade secret laws and non-disclosure agreements…

I've often wondered how often noncompetes get enforced/litigated. I had to sign a noncompete once, in order to get a severance package when the company was going out of business. I asked a lawyer about it, who said don't worry about it, there isn't going to be anyone who will ever enforce it.

A buddy of mine worked in a niche industry and their noncompete didn’t allow them to go to competitors, even to do something different and in an arm of the competitor that was not directly competitive with the company. The company spent a lot of time and resources suing people and threatening litigation. Enough so that employees desire to leave and still work in the industry was chilled and the competitors in the industry started becoming very reluctant to hire from my buddy’s company.

It was pretty messed up and this rule fixes that awful situation.

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