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FTC announces rule banning noncompetes

ftc.gov

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Re: FTC announces rule banning noncompetes

#151

Post by gamblor956 »

jfengel wrote: post #123
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.

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 righ…

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.

When this country was founded, a lot of its residents were slaves, so I'm sure Thomas and Alito will find plenty of fodder in that for their "originalist" stance denying workers rights.

Re: FTC announces rule banning noncompetes

#152

Post by cogman10 »

ixwt wrote: post #130
arcticbull wrote: post #119

Earlier quoted context omitted.

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.

Yup, this is very much the key to why I think this will be killed.

This supreme court is very much on track to eliminate any authority federal agencies have that aren't explicitly written into law. Effectively destroying federal agencies ability to make rules.

Re: FTC announces rule banning noncompetes

#153

Post by reaperman »

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…

Text of the rule itself starts on page 561, "XIII. Other Matters"

Re: FTC announces rule banning noncompetes

#154

Post by brigadier132 »

aidenn0 wrote: post #64

I am 100% for this, but it makes me sad that the legislative branch has nearly completely abandoned its duty to pass laws in favor of granting the executive branch the authority to regulate just about everything. This is a problem for two main reasons: 1. The executive branch can unilaterally revoke these regulations, making them more volatile. Maybe my non-compete is invalid today, but will it be in 4 years when I a…

> completely abandoned its duty to pass laws

That's the duty of the legislature? To make more rules?

Re: FTC announces rule banning noncompetes

#155

Post by o_nate »

jbullock35 wrote: post #141
kevstev wrote: post #43

Earlier quoted context omitted.

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?

No, it just means that during the period after you stop working at the old job but before you can start working at the new job, you are paid only your base. This can be a significant reduction in total comp in industries such as finance.

Re: FTC announces rule banning noncompetes

#156

Post by cryptonector »

Regardless of whether this is a good or bad outcome, I'm still totally non-plussed that the best we can do in the law is to ban "unfair" business practices. What exactly is "unfair"? We all know it when we see it, I suppose, but we don't all see things the same way.

More importantly, and especially if the Chevron doctrine falls, I don't see how the Congress can delegate so much power, so ambiguously, to the FTC. It seems like a "major questions" issue, especially if the FTC then uses this to regulate practices in a way that amounts to usurping Congress's power. For example, imagine that the FTC declared walled gardens an unfair practice. Or suppose the FTC set a maximum transaction fee (think of Apple here). Such examples would have such tremendous impact as to arguably require legislation rather than bureaucratic fiat.

There has to be a better way. Perhaps the best way would be for Congress to every term consider banning recent innovations in business practices that are "unfair" -- to do it before the businesses using those new practices can use them to gain so much power that Congress might have a hard time banning those practices later.

Re: FTC announces rule banning noncompetes

#157

Post by [deleted] »

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?

[deleted]

Re: FTC announces rule banning noncompetes

#158

Post by lifeisstillgood »

lokar wrote: post #97
kevstev wrote: post #43

Earlier quoted context omitted.

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.

They have other tricks. My comp was about 80% bonus, most of which went into deferred comp for a few years. If I was to go to a competitor without permission (independent of the non compete) I would forfeit the deferred comp.

But at a certain point that deferred comp is “enough” that if you just go to work each day and hide in the loos it’s worth waiting around and collecting the cash. And the company won’t benefit from a mostly checked out workforce

Re: FTC announces rule banning noncompetes

#159

Post by tech_ken »

robertlagrant wrote: post #70
dpe82 wrote: post #18

Earlier quoted context omitted.

Because we have a Democratic administration that is taking this stuff seriously.

Seriously, though. Why now?

Because that administration needs red meat to activate their base ahead of an election cycle
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