U.S. Moves to Bar Noncompete Agreements in Labor Contracts

[Scott]

 

In a far-reaching move that could raise wages and increase competition among businesses, the Federal Trade Commission on Thursday unveiled a rule that would block companies from limiting their employees’ ability to work for a rival.

The proposed rule would ban provisions of labor contracts known as noncompete agreements, which prevent workers from leaving for a competitor or starting a competing business for months or years after their employment, often within a certain geographic area. The agreements have applied to workers as varied as sandwich makers, hair stylists, doctors and software engineers.

Studies show that noncompetes, which appear to directly affect roughly 20 percent to 45 percent of private-sector U.S. workers, hold down pay because job switching is one of the more reliable ways of securing a raise.

https://www.nytimes.com/2023/01/05/business/economy/ftc-noncompete.html

Also here:  https://politicalwire.com/2023/01/05/u-s-moves-to-bar-noncompete-agreements/

 

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This is actually huge news. One of the ways that businesses keep workers wages low and competition in check.

As the article points out, this isn't about high tech theft. Hair stylists and sandwich makers have been victims of this practice. With practices like this allowed, it's no wonder that corporate profits are engrossing an ever high share of American GDP. It will be revealing to see what political figures oppose this proposed change.

[Tug]

Good!Ive personally been affected by this

[tgw]

huh - noncompetes need to be regulated, not banned.

 

with a ban, it will become even easier for big business to destroy small business than it is now.

[Credo]

24 minutes ago, tgw said:

huh - noncompetes need to be regulated, not banned.

 

with a ban, it will become even easier for big business to destroy small business than it is now.

But it is OK for businesses to destroy the livelihood of workers?

 

[tgw]

18 minutes ago, Credo said:

But it is OK for businesses to destroy the livelihood of workers?

which a noncompete clause does not do when it's balanced.

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It turns out that the vote in favor of this was three to one. The loan opposition member was, of course, the only Republican on the commission.

[Bluespunk]

Genuinely astonished that this was the situation in USA. 

[placeholder]

14 hours ago, tgw said:

huh - noncompetes need to be regulated, not banned.

 

with a ban, it will become even easier for big business to destroy small business than it is now.

Really? I think it will be a lot easier for an employee to leave and compete against a big business if the threat of a lawsuit isn't hanging over them.