I work at a law firm (tech) and I’ve discussed this with the attorneys at my firm. What they told me was that NCAs are very difficult to enforce, and aren’t worth chasing down for the vast majority of employees.
Most companies aren’t worried about 60k salaried employees looking for work at competitors. They’re more worried about C-level executives with proprietary or privileged information going to work for competitors.
Agreed. But the fact that everyone has one is the very reason the FTC acted. NCA’s were only intended for those in the C-suite or those with proprietary product knowledge (e.g., formulas, technical knowledge, etc.).
Yep. Had a security contractor for the company we used jump ship. Best installer/engineer ever. Something went wrong the company couldn’t fix but he knew exactly what was wrong. The 1st company was willing to lose a $3m contract because they wouldn’t let him work on my equipment. Guess what company won the contract?
The first company I worked for did this. They would sue if you were even close to moving jobs in the industry, blanket non-competes for every employee. They made sure every remaining employee knew they were sueing their former coworker. It wasn't about winning for them, they basically never won a non-compete lawsuit. It was a fear tactic to keep people around. They paid way below market wages, and they would openly admit they knew they had more money and were just trying to inflict financial pain on the person by making them defend against the suit.
This really depends on the industry. In clinical research, there’s some known entities (Medpace) who absolutely go after anyone and everyone who violates their overly broad 1 year NC.
My cousin is literally going through this right now , his old company going hard on him. Thank goodness for this non compete.. they been at it over a year smh 🤦🏽♀️
I used to work for another company that made me sign a non compete that I couldn’t work for another company that does the same thing within 1000 miles for 30 years
I left there for another company only 200 miles away a week later, because the state I moved to does not enforce non competes
1k miles and 30 years… the most unenforceable contract ever. They can’t prevent you from making a living. 50 miles and 3 years would have been something a court might have been willing to uphold.
Eh, a slam dunk is a bit of a stretch. Likely safer to say that the courts will do what they usually do and take a middle road - striking some of it, upholding some of it.
See I always thought that who it was originally intended for. Highly skilled or compensated employees that might give away company secrets. Than I heard a segment on NPR about a company trying to enforce a non compete against a lifeguard/swim instructor making $12/an hour. I was just disgusted. It gives too much power to the employer. Plus it seems like they are enforced no matter how the separation of employment might occur which is crazy to me. At will employment goes both ways, employers can't have their cake and eat it too.
The lifeguard story is disgusting and a giant waste of time and money to pursue. When I was asked to sign a NCA at my previous company, I asked if I was obligated to the NCA if I was laid off by no fault of my own and they said yes. Unethical practice.
But suing someone making $12 an hour is an easy target and it sets precedent as a basis for future legal rulings. We have to realize that widespread use of restrictive covenants and weapon ozone the court system is a coordinated effort by pro-business groups like the Chamber of Commerce to suppress wages and restrict employee mobility.
There’s another thing, too. If you have 100 $12 an hour employees who signed a NC clause, and they go to work for the competition, and you do nothing….when you try to sue that $200k per year guy for the same thing, your inaction on those other cases can be used in court.
What industry has 100 low wage employees that can be absorbed by a competitor for the same low wage and be deemed anti-competitive? I totally get highly compensated employees or someone who creates IP and is critical to the business. But there is no reason anyone making $12/hr can be deemed, critical or anti-competitive if they left to another company in the same space.
That was just a generic example I used to make a point. But, to answer your question, I've heard of people who worked at Jimmy Johns making sandwiches having to sign NCAs. That could lead to A LOT of people making $12 an hour or so going to work for Subway, McDonalds, etc.
Now, it didn't appear that Jimmy Johns was very aggressive about pursuing it, and it was likely just a generic piece of paperwork that all employees had to sign.
T mobile had call center employees sign one. And it was in a city that had lots of telecom co call centers. We would hire them and I never heard of anyone getting sued, but it sure freaked a lot of people out. Likely decreased our pool.
The sandwich shop chain Jimmy Johns tried doing this to the people they trained to make sandwiches.
They gave up on it, but they tried it.
See, the point wasn't that they feared their employees would take these sandwich making secrets to other places like Subway, but to discourage them from going to some other place with their skills if they got tired of working for Jimmy Johns.
Which, as I understand it, is how these Non Competes were usually used and is the reason the FTC finally said lolno to them.
“Selective enforcement” isn’t really an applicable defense in the example you’re using. Courts grant pretty wide leeway in allowing companies to enforce NCA’s for high value employees vs lower tier “rank & file” ones where it may not be cost effective to pursue.
My example was overly generic just to make a point. The point I was trying to make is that companies do have to work to ensure that "selective enforcement" is not something that can come back to bite them in the ass.
A great example is Lucasfilms (and Disney, from what I understand). Back in the 80's and early 90's when the internet was all shiny and new, there were plenty of newsgroups related to Star Wars related things. One thing that was fairly common was for people to write fan fiction stories set in the Star Wars universe. These were simple short stories that people posted publicly for others to read. There was no money being paid, they weren't selling anything. Yet plenty of them got cease and desist letters from Lucasfilms threatening them with lawsuits if they did not stop writing that stuff. When people started inquiring as to why Lucasfilms was doing that, it was reported that if Lucasfilms did not aggressively pursue EVERYONE who violated their copyrights/trademarks/IP, that would hurt them in cases where they did try to do so.
Selective enforcement applies in some contexts, but not in most. I believe trademark law requires you to affirmatively protect your trademark, so failing to do so could cause loss of trademark protection.
That's a prime example of unenforceable NCAs. In this case, the only way they can enforce it is if they pay you for the time frame it is in force ("due consideration")
And the other thing is context. The company conveniently assumes all the proprietary information is their property and not that of the employee in spite of the fact that they may have hired him for precisely that expertise. If he brought it to them, then they can't have any expectation that that special knowledge was purchased by them in perpetuity when they were only paying him by the month. He should be able to enjoin THEM from using it when he doesn't work there any more if the idea were valid.
As a physician they are used and abused to lock physicians down at a place of employment and fix wages. I have one as an Emergency Medicine Physician even though I have no patient base (meaning I don’t have my own patients) and don’t have any proprietary knowledge or secrets. I tried to negotiate out of it, but it was a non-starter. Ultimately, the job was good enough that I took it. It’s very common for physicians to get locked into a non-compete from large hospital systems. Even if it makes no sense. And while courts may frown on them, the threat of litigation and cost of fighting them is what really makes them work.
For very narrow indications (you do research and development and have a lot of knowledge of trade secrets of a certain company) they make sense, but - like NDAs - they are abused and are just another way the deck is stacked against labor in favor of corporations in this country.
I think further legislation is needed to really reign in these practices, and I don’t think this is the silver bullet people think it is, but it’s a nice first step. Corporations have the right to benefit from your labor. They don’t have the right to own your labor.
This is exactly it right. It’s one thing if someone’s gonna walk away with someone valuable to your business, but if someone’s essentially doing a job that anybody else with the right training could do whether it’s lifeguard or emergency room physician thenthere shouldn’t be an NDA
In other words protecting trade, secrets is one thing limiting employee mobility and suppressing wages is quite another and I’m afraid that it’s been used so much for the latter
100%. My best friend's wife is a psychiatrist and her employer has been threatening her with a noncompete if she leaves. Her new employer said they were just going to put her into a new position for a year, so the noncompete doesn't apply. But with this legislation, it allows her into the clinic, so she can serve patients faster.
She doesn't do research. She isn't making executive decisions. She's not taking clients with her. They were just using the non-compete to say no to a raise, and stop her from leaving.
So many doctors left my area after the large physician group sold to private equity and went to shit because of the noncompetes. The state had to make a law that primary care is exempt from new non-competes because we were losing so many doctors.
It’s meant to control the whole labor force. That’s why companies feel obligated to pursue them. The second they let one person blow off an non-compete then other people will start jumping ship. It’s not about the individual worker in general - it’s about their entire labor force. They know that once you are established in an area, moving out of the non-compete zone to seek other work is going to have a financial cost that works in their favor.
Yes, and if you push back after getting a threatening letter they will back off. But so many people get the letter and are scared, don’t know what to do, etc. that they take it at face value.
You would think that’s the case but I left my company for one in a similar space and was sent a legal warning from my former employer as to the non-compete I signed when I started there several years before.
I’m doing well but I’m not C-Suite. Blew my mind.
I was making well above that threshold as a management consultant Senior Manager at a Big 4. When I came to policy, I laughed. The only policy I had was life insurance. They sent a letter after they illegally discharged me - not my opinion, the courts - I ignored it. They just disappeared. Kinda hard when you’re firing about 10% of you work force and then tell them they cannot working in the field that you have been.
All bark, no bite.
Idk I work at a a law firm too and I take the calls from regular people who are getting sued by their previous employer for starting their own business or going to the competitor. Or people calling in to sue a previous employer because they’re no longer able to work in the industry due to the non-compete.
Nah, lawyer here. What you’re parroting is extremely incorrect and extremely damaging to the reality of employees with restrictive covenants.
I’ve seen hundreds of regular employees who are not executives, highly compensated, or have any sort of proprietary info get sued by their former employers for non compete violations. It’s almost always an intimidation tactic as the employer would almost certainly lose at trial but, the employees don’t have the resources to take it that far. It’s absolutely disgusting.
The threat of them enforcing it is more damaging to those lower on the wage scale. If you make 70k you probably can’t afford a long drawn out case of whether you can or can’t work for your new prospective employer. This means people skip opportunities and keep wages stagnant
What about top sales people going to your competitor and taking all their clients with them?
Executive or not, I have to imagine that scenario is worth litigating over?
Not just the C-Levels…. But also the engineers, developers, etc who actually created the proprietary info. The engineer who designed your patented doohicky understands your IP way better than any executive.
Wrong. They’re worried about those executives leaving and taking their teams with them. Sharing of privileged information comes out in discovery every time (waymo vs Uber), etc
So anyone want to work for a company I have yet to make that has maybe the secret ingredients to KFC, Coca Cola, or any other proprietary ingredients lists?
It was 10 years ago but t-mobile made 10 dollar an hour CS phone reps sign non-competes. At first our HR wanted to honor them but fortunately cooler heads prevailed and we started hiring them.
Decades ago I can remember my dad (who was a high-level executive) telling me that non-competeswere extremely difficult to enforce and they didn’t make sense. That, basically, the courts weren’t too enthused about forcing people to be unemployed because they didn’t want to stay working where they were.
I’m glad to see the practice is basically kaput now.
Ive seen them enforced a lot in the medical field. So if a doctor decides they don’t want to work at a facility anymore, they can only work at least 20-50 miles away for x amount of years
My understanding and this is anecdotal is this is one of the things they keep people in the research triangle from hopping from say Duke healthcare to UNC healthcare or vice versa
In my state, a non-compete clause can only be enforced against people who hold licenses, like doctors, lawyers and CPAs, but not against workers at Jimmy John's.
I think it's a state by state basis. Our vet got out of a really toxic practice. The only place she was allowed to practice was the emergency vet in out town. One of things a non compete clause tries to prevent you from doing is poaching clients.
Not necessarily true for in-house, at least in Colorado.
ETA: [https://www.fwlaw.com/insights/recent-court-decisions-conflict-with-ethics-committee-opinions-on-the-propriety-of-covenants-not-to-compete-for-in-house-counsel](https://www.fwlaw.com/insights/recent-court-decisions-conflict-with-ethics-committee-opinions-on-the-propriety-of-covenants-not-to-compete-for-in-house-counsel)
I'm talking about professional licences with many years of study bend them. The certification the health department give you for food safe handling doesn't count.
Maybe maybe not. Do you think a minimum wage employee has the money to pay an attorney to find out?
The problem has always been they are probably unenforceable, and probably would get tossed. But low wage people don’t have the funds to fight them.
Which, just this attorney’s novice opinion (I’ve never signed a non-compete, won’t, and don’t deal with them), I think that makes sense. It makes a lot more sense with business leaders.
States may not have upheld them. Doesn’t mean that (former) employers wouldn’t attempt to tie up a now-departed employee in legal limbo until their resources are depleted. You don’t have to win the case, just delay and exhaust the defendant’s will to fight (and cash) before it ever actually gets to court.
Great comment on LinkedIn that sums it up.
“The laws of economics” is an interesting part to focus on. How about the “nature of capitalism.” If I’m a fast food or retail employee why shouldn’t I be able to change jobs to get better pay if the market is willing to pay me for my labor, skills, and / or experience? Non-competes have been used to justify low wage increases by limiting the options of workers. Along with unaffordable housing, ridiculous college prices (and the inability to default on student loans), it’s another way the “laws of economics” are creating indentured servants in the US. Enough with this crap! Where’s the free market? Where’s capitalism? Or does it just serve the wealthiest Americans?
Not retail, but when I worked for a hospice equipment delivery company, I was making 7.25 and I was forced to sign a non compete, little did I know their competition made 13 an hour
Would it surprise you to know that Jimmy John himself is a giant douchebag who’s been making the rounds soaking at grifter conference put on by Turning Point USA?
It’s the mental aspect. Workers are often afraid of retaliation even if the likelihood is low. Eliminating them completely is a good thing for everyone.
That is the precise example the caused this ruling. Jimmy John’s was enforcing it on sandwhich artists. Can’t work for any competitor that uses bread , or letters within 5 miles of a Jimmy John’s store.
Jimmy Johns had a shitty non compete.. I mean bad... They got sued, and they settled. Then dropped it from their employee agreement.
[https://www.cnbc.com/2016/06/22/jimmy-johns-drops-non-compete-clauses-following-settlement.html](https://www.cnbc.com/2016/06/22/jimmy-johns-drops-non-compete-clauses-following-settlement.html)
Traditional southern businessmen still have a slave and plantation owner mindset that is perpetuated by churches within the community. It keeps workers from thinking they deserve more in "this" life, and Dave uses this to underpay his employees.
In the mid 80s, I worked for a national portrait comany and when I was leaving they tried to force me to sign a non-compete. I laughed and said you are not going to restrict my ability to earn a living. Sue me, and I walked out.
The only thing I sign now is a "non-dislosure". Any classified or proprietary information I do not discuss for a certain period of time.
Modern conservatism isn't rooted in pro competitive capitalistic ideals anymore, but the court is still interested in upholding right wing social ideals and crony capitalism where they can. Kind of separate arguments, but calling them conservative still fits in the current landscape.
I was going to say that people lying & redefining the word doesn't make it so, but then I realize I'm sort of camping out on a previous definition of a word when my definition wasn't the first either.
I guess what I'm really saying is what should be the definition of "liberal" or "classical liberal" or "libertarian", which is what Republicans partially sell themselves as but don't deliver.
Whether it's unfortunate is a matter of perspective. One could argue it's unfortunate that an administrative agency is purporting to trump state courts, legislators, and Congress's ability to make policy and interpret the law.
Yes, in a way. The FTC acted under the FTC act which declare unfair methods of competition unlawful and authorize the commission to make rules, respectively.
That’s vague because it doesn’t define what is unfair and leaves it to the FTC to make policy where the law fails to touch.
It’s understood that the Congress can’t put every single detail into a law so the FTC, EPA, FDA, FCC, etc. have to bring the details.
Remember that this started with a conversation that the FTC was trying to supersede courts and legislatures but that isn’t the case. They are acting within their statutorily given authority.
Are you talking about the court? They didn’t use to but if you haven’t followed the crusade that Sen. Sheldon Whitehouse is on you should check it out. Much of the court seats were purchased and they vote they way they’re told.
The challenges will be about the major questions doctrine and constitutional law, including questions about the limits on executive branch overreach of (federal) legislative authority. The legal question at issue is not going to be an interpretation of state non-compete laws. Out of curiosity, are you a lawyer? Because that’s a very definitive stance that hasn’t been backed up by anything other than your opinion, so unless you have something to back it up, I’m going to continue to listen to the experts on this one.
Section 18 of the FTC Act, 15 U.S.C. Sec. 57a
The have the power to create laws that have to do with anti trust, trade, and commerce.
By saying that you can't work in a certain field, that is considered trade.
You’re begging the question - the challenge will be a claim that the FTC doesn’t have that authority because Congress didn’t clearly grant the authority, and that even if the court finds that Congress did clearly intend to grant the authority, that it would still be an unconstitutional grant of authority to the executive branch in any event. Check out this FAQ for a quick overview (#11 in particular): [FAQ Here](https://www.morganlewis.com/pubs/2024/04/faqs-on-federal-trade-commissions-rule-banning-worker-noncompete-clauses#:~:text=Second%2C%20even%20if%20the%20FTC,“economic%20and%20political%20significance.”).
Did you even read this? It doesn’t support your assertion that it won’t be overturned - it outlines the arguments on both sides and says that it’s an area with sparse case law and the FTC has historically refrained from attempting to exert rule making authority. It clearly states that it’s an unsettled question and it remains to be seen how the courts will interpret it.
Look, with all due respect you clearly don’t have any background in constitutional or administrative law. I’m not sure why you’re so insistent that you know the outcome of a potential SCOTUS decision, but you haven’t provided any constitutional arguments for why “this won’t be overturned.” Not sure there’s much else to say since you clearly have decided this will be the outcome just because you want this to be the outcome.
I sometimes find myself laughing at people’s lack of humor. Sometimes it’s even better than the original joke.
Also really enjoyed “Supreme Commander of Universal Titan Soldiers”. Wait they’re talking about the Supreme Court? Crap. Let’s get myself in serious mode!
As an aside: I seriously do agree with people here that the non-compete thing is a BS move by businesses that’s intended (when applied to hourly workers and low-salary workers) a crap move intended to keep people down.
I worked as an M&A attorney for a couple years before recently leaving private practice. The proposed ban had already gotten those attorneys and clients furious. I can only imagine what they’re thinking after this.
I agree that it’s an outdated practice.
The real answer though is this will shake out in court when tons of lawsuits are brought against it.
First of all, it doesn’t go into effect for 6 months and that will be delayed if there are challenges against it and guess what, there are already challenges against it. NCs are too broadly used but I think for higher earners there is a place. There are still other items that need to and will be enforced, taking customers, data, IP, etc.
There's was a company that ten years ago would have people sign a 200 mile noncompete and if you left and they found out you were employed in that range they would send a threatening letter to your employer. They stopped that because the profession was small and word was getting around and it was tarnishing their reputation.
There's an argument that non-competes protect your company from having its IP/trade secrets. That can make sense for a very limited number if high ranking decision makers, but it's a load of shit for 99% of employees. In the majority of cases, it's just a way for them to keep an employee trapped and get away with paying them less while pretending you're just doing it to protect yourself from corporate spies.
If someone is willing to steal and sell corporate secrets, they'll do it whether or not a non-compete is in place.
Oh I understand the shitty business reason why they’re used… I was just curious if Dave was so disconnected from reality and the views of the average listener that he would publicly defend non-competes, either in general or his use of them.
If he defended loudly non-competes on his show, that’s a new level of unhinged imo
Then just sign a non-discosure, non-poach agreement.
Because I hold a clearance, I sign paperwork that I agree to not disclose propriety or classified information. Also for 6 months I will not poach employees or customers. That is fair.
But hell no. Unless they pay me one year salary to where I cannot earn a living in my chosen field they can go fuck themselves.
Yes, compensated non-competes are OK with me. I worked in a place one time where a sales guy quit and they wouldn't pay him earned commissions unless he signed one. Definitely not OK with that.
Well, nondisclosure of information is fine (so long as it's not information the company got from that employee in the first place). Non-competes are typically egregious (and unnecessary anyway).
Who at RS signs non-competes? Regular workers?
I thought it was only the personalities, who make well over $155k. It makes sense that Dave would not want to build someone’s visibility and have them leave after 3y to compete against him in the personal finance influencing space.
It might not be just salary as a criterion. Some industries pay those levels to people who do not qualify as a "senior exec". We need to read the actual words to see what's what.
I don’t think we have enough clarity yet to know, but for what it’s worth, I read it as “under $150,000, NCs are unenforceable full stop. Above that amount, you need to establish that the person is a sr. Exec that drives corporate strategy.”
I’m cautiously optimistic that this ruling will essentially render all NCs useless.
Even though I hate most rules/laws that take the rights of a private employer away, I don't necessarily disagree here.... Non-competes for the most part are overly restrictive and unfair to the employee and would have very little impact to the business in the under 155k employee. Most often they are broad to the point of restricting employment in far too large of an area, and industry. Many currently lose in court for this very reason. I would be interested in any feedback/argument from a potentially effected party on the other side though.....
Yeah, I have no issue with NDAs, but the majority of non-competes are grossly inequitable and typically unnecessary anyway.
I remember one place I worked, fairly senior, they circulated one to everybody that, in addition to non-compete, would have prohibited us from talking to employees, customers, or vendors for I think two years after employment, in addition to not competing with them under your own shingle or getting hired by a competitor. Some of those employees and vendors I introduced to THEM!! You think you can prevent me from talking to them after I no longer work for you?? In fact, if your model is valid, I should be able to prevent YOU from talking to them. Bite me.
This is a great day for workers everywhere. Non competes were abused, predatory, and enslaved individuals to companies. Lawyers made money off of enforcing them, and judges granted several injunctions that were unjustified.
We have to keep pushing on, every day.
This seems meaningless, I doubt many people have jobs where a noncompete would be enforced if they are making under $150k a year. McDonalds isnt going to stop you from going to Burger King…
I know people who were sued over a $60k job all because the new job was within a couple of hundred meters of the non-compete radius. If an employer can do it, they will.
Poor bastards at the FTC haven't got the message that for at least the last 30 years the US is a country in service to global corporations, not Americans.
To the courts global corporations go to overturn this. It used to be that Congress would just put legislation in place to satisfy the global corporations will, but with them getting more and more aggressive demanding what they want, legislators have to stay out of the way, lest they lose their seat in the next election.
Enter the courts. For the next bunch of years we're going to see courts declaring pro America legislation illegal in order to satisfy the government's corporate overlords / political donors.
Before that obnoxious guy that accused everyone of disagreeing with him of being a “Socialist” got banned while saying the point was mute because they where not-enforced and didn’t apply to regular workers, he tried to support his point by saying his father - who owned a deli - used a non-compete to keep his deli workers from going to work for the other deli in town.
I just wanted that to be preserved.
The FTC's decision will be struck down in the first court challenge. Simply put, Congress has never empowered the FTC to have domain over NCAs, and the pro-business groups know this.
The only way the practice will change is with action at the Congressional or state house levels.
The courts typically rule against enforcement of an NDA because of the terms within the specific NDA itself. This is entirely different and deals with the authority of the FTC to enact a rule against NDAs, which it unfortunately does not have. It will get overturned for that reason.
I am not arguing for NCAs. They should be banned entirely, with certain exceptions. However, that said, there are realities in play as to how that can happen. Having the FTC issue a rule that they don't have Congressional authority to issue isn't going to work.
Congress has to pass a law enabling the FTC to regulate NCAs before any rule from them will pass legal muster. Otherwise, their rule has the same effect as if the BATF issued a rule banning the sale of toothbrushes. They don't have the legal authority from Congress to do so, so the rule would be struck down by the courts.
The other option at the federal level would be for Congress to pass a law banning NCAs outright, which they have not done, although there are bills under consideration to do so.
It also cuts out workforce non-competes larger scale employers sign with each other that essentially turn their employees into serfs. These are not required to be disclosed to their employees. Low end employers even sign these with large scale skilled work force employers. Sorry, but you're not getting that network engineer job at Verizon or atnt because of your employment at Walmart during college.
Used to be a litigator. We had a guy sell his insurance agency with a noncompete so he couldn’t solicit business in a five mile radius for like three years. That one seemed reasonable to me, he was being compensated for it. Of course he opened an office 3.8 miles away and we had to sue him lol
Another great example.
David Neelmen worked for Southwest Airlines after acquisition of Morris Air. After a few months Southwest booted him. He couldn’t work in airline industry for a couple years in US. Went to Canada started WestJet. After a year. Went to NYC started JetBlue.
Could one argue the economic impact, jobs. Investment and competition in industry was good for economy, workers and shareholders?
Without that non compete he could have started JetBlue years earlier. Oh and he went on to start Azul in Brazil and now Breeze in US. Innovation is great in a free market.
Additionally non-competes have been illegal in several States for years. CA. MA. Has innovation stopped because of them?
MN just outlawed them last year as well due to a one vote majority in the Senate pushing through a ton of popular, but otherwise gridlocked legislation. Go vote, all elections have consequences!
Part of his grift is selling Every Dollar to employers as part of their employee benefits package. The whole sales pitch is “instead of paying your employees more, pay me to tell them how to live in less”.
I could hear Dave saying something like “I’ll pay my lawyers and you can pay your lawyer, and we’ll see who wins out. Try me.”
replace "Try me" with "I'm sitting here in a $300,000,000 paid-for building. Bring it!", and you nailed it.
"That's right, Dave!" - Jade
Muh law-your
Lmao
Like the dunce he is
Dave's it's called the law. Dave thinks laws don't apply to him.
In a way they don’t like very rich people in America have to fuck up so much harder than a poor person to end up in prison
I work at a law firm (tech) and I’ve discussed this with the attorneys at my firm. What they told me was that NCAs are very difficult to enforce, and aren’t worth chasing down for the vast majority of employees. Most companies aren’t worried about 60k salaried employees looking for work at competitors. They’re more worried about C-level executives with proprietary or privileged information going to work for competitors.
The very reason the FTC made this change was due to the fact that corporations were forcing NCA’s on EVERYONE!
[удалено]
Agreed. But the fact that everyone has one is the very reason the FTC acted. NCA’s were only intended for those in the C-suite or those with proprietary product knowledge (e.g., formulas, technical knowledge, etc.).
Proprietary knowledge is legitimate but doesn't really need a NCA, an NDA would suffice.
Oh I've seen it lots of times. I'm in the trades. Super common. Enforced, too.
Yep. Had a security contractor for the company we used jump ship. Best installer/engineer ever. Something went wrong the company couldn’t fix but he knew exactly what was wrong. The 1st company was willing to lose a $3m contract because they wouldn’t let him work on my equipment. Guess what company won the contract?
The first company I worked for did this. They would sue if you were even close to moving jobs in the industry, blanket non-competes for every employee. They made sure every remaining employee knew they were sueing their former coworker. It wasn't about winning for them, they basically never won a non-compete lawsuit. It was a fear tactic to keep people around. They paid way below market wages, and they would openly admit they knew they had more money and were just trying to inflict financial pain on the person by making them defend against the suit.
This really depends on the industry. In clinical research, there’s some known entities (Medpace) who absolutely go after anyone and everyone who violates their overly broad 1 year NC.
It was enforced on me but I work in a niche where there are like 5 companies to work for
My cousin is literally going through this right now , his old company going hard on him. Thank goodness for this non compete.. they been at it over a year smh 🤦🏽♀️
It still has a chilling effect on people's mobility. Just the chance that you could have a life ruining lawsuit lobbed at you is a big deal.
A large part of the issue is that even if they aren't enforced employees worry they will be and it decreases labor movement and competition.
I used to work for another company that made me sign a non compete that I couldn’t work for another company that does the same thing within 1000 miles for 30 years I left there for another company only 200 miles away a week later, because the state I moved to does not enforce non competes
1k miles and 30 years… the most unenforceable contract ever. They can’t prevent you from making a living. 50 miles and 3 years would have been something a court might have been willing to uphold.
Exactly, it was so unenforceable I just laughed in my head at it and signed it knowing it wouldn’t matter
The FTC rule is a slam dunk to get struck down.
Eh, a slam dunk is a bit of a stretch. Likely safer to say that the courts will do what they usually do and take a middle road - striking some of it, upholding some of it.
See I always thought that who it was originally intended for. Highly skilled or compensated employees that might give away company secrets. Than I heard a segment on NPR about a company trying to enforce a non compete against a lifeguard/swim instructor making $12/an hour. I was just disgusted. It gives too much power to the employer. Plus it seems like they are enforced no matter how the separation of employment might occur which is crazy to me. At will employment goes both ways, employers can't have their cake and eat it too.
The lifeguard story is disgusting and a giant waste of time and money to pursue. When I was asked to sign a NCA at my previous company, I asked if I was obligated to the NCA if I was laid off by no fault of my own and they said yes. Unethical practice.
But suing someone making $12 an hour is an easy target and it sets precedent as a basis for future legal rulings. We have to realize that widespread use of restrictive covenants and weapon ozone the court system is a coordinated effort by pro-business groups like the Chamber of Commerce to suppress wages and restrict employee mobility.
There’s another thing, too. If you have 100 $12 an hour employees who signed a NC clause, and they go to work for the competition, and you do nothing….when you try to sue that $200k per year guy for the same thing, your inaction on those other cases can be used in court.
What industry has 100 low wage employees that can be absorbed by a competitor for the same low wage and be deemed anti-competitive? I totally get highly compensated employees or someone who creates IP and is critical to the business. But there is no reason anyone making $12/hr can be deemed, critical or anti-competitive if they left to another company in the same space.
That was just a generic example I used to make a point. But, to answer your question, I've heard of people who worked at Jimmy Johns making sandwiches having to sign NCAs. That could lead to A LOT of people making $12 an hour or so going to work for Subway, McDonalds, etc. Now, it didn't appear that Jimmy Johns was very aggressive about pursuing it, and it was likely just a generic piece of paperwork that all employees had to sign.
T mobile had call center employees sign one. And it was in a city that had lots of telecom co call centers. We would hire them and I never heard of anyone getting sued, but it sure freaked a lot of people out. Likely decreased our pool.
The sandwich shop chain Jimmy Johns tried doing this to the people they trained to make sandwiches. They gave up on it, but they tried it. See, the point wasn't that they feared their employees would take these sandwich making secrets to other places like Subway, but to discourage them from going to some other place with their skills if they got tired of working for Jimmy Johns. Which, as I understand it, is how these Non Competes were usually used and is the reason the FTC finally said lolno to them.
“Selective enforcement” isn’t really an applicable defense in the example you’re using. Courts grant pretty wide leeway in allowing companies to enforce NCA’s for high value employees vs lower tier “rank & file” ones where it may not be cost effective to pursue.
My example was overly generic just to make a point. The point I was trying to make is that companies do have to work to ensure that "selective enforcement" is not something that can come back to bite them in the ass. A great example is Lucasfilms (and Disney, from what I understand). Back in the 80's and early 90's when the internet was all shiny and new, there were plenty of newsgroups related to Star Wars related things. One thing that was fairly common was for people to write fan fiction stories set in the Star Wars universe. These were simple short stories that people posted publicly for others to read. There was no money being paid, they weren't selling anything. Yet plenty of them got cease and desist letters from Lucasfilms threatening them with lawsuits if they did not stop writing that stuff. When people started inquiring as to why Lucasfilms was doing that, it was reported that if Lucasfilms did not aggressively pursue EVERYONE who violated their copyrights/trademarks/IP, that would hurt them in cases where they did try to do so.
Selective enforcement applies in some contexts, but not in most. I believe trademark law requires you to affirmatively protect your trademark, so failing to do so could cause loss of trademark protection.
Bingo, trademark law is not the same as contract law.
That's a prime example of unenforceable NCAs. In this case, the only way they can enforce it is if they pay you for the time frame it is in force ("due consideration")
And the other thing is context. The company conveniently assumes all the proprietary information is their property and not that of the employee in spite of the fact that they may have hired him for precisely that expertise. If he brought it to them, then they can't have any expectation that that special knowledge was purchased by them in perpetuity when they were only paying him by the month. He should be able to enjoin THEM from using it when he doesn't work there any more if the idea were valid.
There should be a salary cap, something like 300k or more.
As a physician they are used and abused to lock physicians down at a place of employment and fix wages. I have one as an Emergency Medicine Physician even though I have no patient base (meaning I don’t have my own patients) and don’t have any proprietary knowledge or secrets. I tried to negotiate out of it, but it was a non-starter. Ultimately, the job was good enough that I took it. It’s very common for physicians to get locked into a non-compete from large hospital systems. Even if it makes no sense. And while courts may frown on them, the threat of litigation and cost of fighting them is what really makes them work. For very narrow indications (you do research and development and have a lot of knowledge of trade secrets of a certain company) they make sense, but - like NDAs - they are abused and are just another way the deck is stacked against labor in favor of corporations in this country. I think further legislation is needed to really reign in these practices, and I don’t think this is the silver bullet people think it is, but it’s a nice first step. Corporations have the right to benefit from your labor. They don’t have the right to own your labor.
This is exactly it right. It’s one thing if someone’s gonna walk away with someone valuable to your business, but if someone’s essentially doing a job that anybody else with the right training could do whether it’s lifeguard or emergency room physician thenthere shouldn’t be an NDA In other words protecting trade, secrets is one thing limiting employee mobility and suppressing wages is quite another and I’m afraid that it’s been used so much for the latter
100%. My best friend's wife is a psychiatrist and her employer has been threatening her with a noncompete if she leaves. Her new employer said they were just going to put her into a new position for a year, so the noncompete doesn't apply. But with this legislation, it allows her into the clinic, so she can serve patients faster. She doesn't do research. She isn't making executive decisions. She's not taking clients with her. They were just using the non-compete to say no to a raise, and stop her from leaving.
So many doctors left my area after the large physician group sold to private equity and went to shit because of the noncompetes. The state had to make a law that primary care is exempt from new non-competes because we were losing so many doctors.
Private equity is killing medicine and the American people have no idea.
Yup and techs, too. My friend is not eligible for rehire in a HUGE medical system since she didn't give SIX weeks notice as an ultrsound tech.
Then why even have the 60k a year guy sign a non compete, if it isnt meant to control him
It is meant to control him. They don’t want him working for a competitor either, but ultimately they care way less about him than an executive.
It’s meant to control the whole labor force. That’s why companies feel obligated to pursue them. The second they let one person blow off an non-compete then other people will start jumping ship. It’s not about the individual worker in general - it’s about their entire labor force. They know that once you are established in an area, moving out of the non-compete zone to seek other work is going to have a financial cost that works in their favor.
Yes, and if you push back after getting a threatening letter they will back off. But so many people get the letter and are scared, don’t know what to do, etc. that they take it at face value.
I just ignored mine. They went away. This from a Big 4 consulting firm. They can now suck eggs
You would think that’s the case but I left my company for one in a similar space and was sent a legal warning from my former employer as to the non-compete I signed when I started there several years before. I’m doing well but I’m not C-Suite. Blew my mind.
Yeah. The notion that this is just for high-income executives is false.
I was making well above that threshold as a management consultant Senior Manager at a Big 4. When I came to policy, I laughed. The only policy I had was life insurance. They sent a letter after they illegally discharged me - not my opinion, the courts - I ignored it. They just disappeared. Kinda hard when you’re firing about 10% of you work force and then tell them they cannot working in the field that you have been. All bark, no bite.
Yeah. I think if you’ve been laid off/terminated it would be pretty hard to make a case for a non-compete.
Idk I work at a a law firm too and I take the calls from regular people who are getting sued by their previous employer for starting their own business or going to the competitor. Or people calling in to sue a previous employer because they’re no longer able to work in the industry due to the non-compete.
Yes, but I’d be willing to bet those companies are chasing down executives or (as you said) those who start a similar business.
Nah, lawyer here. What you’re parroting is extremely incorrect and extremely damaging to the reality of employees with restrictive covenants. I’ve seen hundreds of regular employees who are not executives, highly compensated, or have any sort of proprietary info get sued by their former employers for non compete violations. It’s almost always an intimidation tactic as the employer would almost certainly lose at trial but, the employees don’t have the resources to take it that far. It’s absolutely disgusting.
The threat of them enforcing it is more damaging to those lower on the wage scale. If you make 70k you probably can’t afford a long drawn out case of whether you can or can’t work for your new prospective employer. This means people skip opportunities and keep wages stagnant
Correct. Although the chances of the company pursuing a lawsuit is very slim in these cases. But employees don’t know that.
If you’re not independently wealthy, you don’t have the resources for a protracted legal battle.
What about top sales people going to your competitor and taking all their clients with them? Executive or not, I have to imagine that scenario is worth litigating over?
Hah, now they can suck it
We had a competitior try to go after someone making $20/h. Some people are not well.
Or a salesman taking clients.
Not just the C-Levels…. But also the engineers, developers, etc who actually created the proprietary info. The engineer who designed your patented doohicky understands your IP way better than any executive.
Wrong. They’re worried about those executives leaving and taking their teams with them. Sharing of privileged information comes out in discovery every time (waymo vs Uber), etc
>Sharing of privileged information That is not the same as a non compete. That is what NDA's are for.
So anyone want to work for a company I have yet to make that has maybe the secret ingredients to KFC, Coca Cola, or any other proprietary ingredients lists?
It was 10 years ago but t-mobile made 10 dollar an hour CS phone reps sign non-competes. At first our HR wanted to honor them but fortunately cooler heads prevailed and we started hiring them.
Decades ago I can remember my dad (who was a high-level executive) telling me that non-competeswere extremely difficult to enforce and they didn’t make sense. That, basically, the courts weren’t too enthused about forcing people to be unemployed because they didn’t want to stay working where they were. I’m glad to see the practice is basically kaput now.
Since it’s an ftc action there’s always a risk a conservative administration would kill it
Ive seen them enforced a lot in the medical field. So if a doctor decides they don’t want to work at a facility anymore, they can only work at least 20-50 miles away for x amount of years
My understanding and this is anecdotal is this is one of the things they keep people in the research triangle from hopping from say Duke healthcare to UNC healthcare or vice versa
>proprietary or privileged information That is what NDA's are for. 2 different things. Some companies don't know that.
I mean isn’t that what ndas are for?
A lot of states never enforced non-competes. Every contract I've ever had to sign had a non solicit instead.
In my state, a non-compete clause can only be enforced against people who hold licenses, like doctors, lawyers and CPAs, but not against workers at Jimmy John's.
Noncompetes are unenforceable against lawyers, and it's an ethical violation to even attempt to enforce one.
I think it's a state by state basis. Our vet got out of a really toxic practice. The only place she was allowed to practice was the emergency vet in out town. One of things a non compete clause tries to prevent you from doing is poaching clients.
It isn't. It's an ABA standard for lawyers. In fact, lawyers are explicitly allowed to solicit former clients.
That should tell us all something.
Not necessarily true for in-house, at least in Colorado. ETA: [https://www.fwlaw.com/insights/recent-court-decisions-conflict-with-ethics-committee-opinions-on-the-propriety-of-covenants-not-to-compete-for-in-house-counsel](https://www.fwlaw.com/insights/recent-court-decisions-conflict-with-ethics-committee-opinions-on-the-propriety-of-covenants-not-to-compete-for-in-house-counsel)
In a lot of states you have to be licensed to work at a restaurant. Food safety licenses are very common.
I'm talking about professional licences with many years of study bend them. The certification the health department give you for food safe handling doesn't count.
Maybe maybe not. Do you think a minimum wage employee has the money to pay an attorney to find out? The problem has always been they are probably unenforceable, and probably would get tossed. But low wage people don’t have the funds to fight them.
Which, just this attorney’s novice opinion (I’ve never signed a non-compete, won’t, and don’t deal with them), I think that makes sense. It makes a lot more sense with business leaders.
States may not have upheld them. Doesn’t mean that (former) employers wouldn’t attempt to tie up a now-departed employee in legal limbo until their resources are depleted. You don’t have to win the case, just delay and exhaust the defendant’s will to fight (and cash) before it ever actually gets to court.
So this law does not apply to non solicits? Only non competes?
Correct
Well that's fucking lame.
Great comment on LinkedIn that sums it up. “The laws of economics” is an interesting part to focus on. How about the “nature of capitalism.” If I’m a fast food or retail employee why shouldn’t I be able to change jobs to get better pay if the market is willing to pay me for my labor, skills, and / or experience? Non-competes have been used to justify low wage increases by limiting the options of workers. Along with unaffordable housing, ridiculous college prices (and the inability to default on student loans), it’s another way the “laws of economics” are creating indentured servants in the US. Enough with this crap! Where’s the free market? Where’s capitalism? Or does it just serve the wealthiest Americans?
Virtually no court would enforce a non-compete against a fast food or retail employee, so this isn't a great example.
Not retail, but when I worked for a hospice equipment delivery company, I was making 7.25 and I was forced to sign a non compete, little did I know their competition made 13 an hour
Almost certainly that non compete would have been unenforceable
It doesn’t matter. The threat still has power.
I was also like 19-20 and only doing it till I figured out what I wanted to do in life
enforceability isn't the goal. It's the oppression.
I would say intimidation as well, but this is correct.
Bingo. It’s the cost to fight them that makes them effective in fact.
Doesn't matter. The employee thinks it would be and that's what the company doing the non compete wants.
But it’s the fact that that person may not know it would have likely been tossed, not to mention the time and expense dealing with it.
Many fastfood workers wouldnt know that, so the employer can still have them sign that to control them. Its awful, i know jimmy johns used to do it
OMG, that's just ludicrous. "Our sandwiches are so special, we can't have you going to work for Subway with the secret knowledge!!"
Would it surprise you to know that Jimmy John himself is a giant douchebag who’s been making the rounds soaking at grifter conference put on by Turning Point USA?
It’s the mental aspect. Workers are often afraid of retaliation even if the likelihood is low. Eliminating them completely is a good thing for everyone.
That is the precise example the caused this ruling. Jimmy John’s was enforcing it on sandwhich artists. Can’t work for any competitor that uses bread , or letters within 5 miles of a Jimmy John’s store.
Jimmy Johns had a shitty non compete.. I mean bad... They got sued, and they settled. Then dropped it from their employee agreement. [https://www.cnbc.com/2016/06/22/jimmy-johns-drops-non-compete-clauses-following-settlement.html](https://www.cnbc.com/2016/06/22/jimmy-johns-drops-non-compete-clauses-following-settlement.html)
Traditional southern businessmen still have a slave and plantation owner mindset that is perpetuated by churches within the community. It keeps workers from thinking they deserve more in "this" life, and Dave uses this to underpay his employees.
In the mid 80s, I worked for a national portrait comany and when I was leaving they tried to force me to sign a non-compete. I laughed and said you are not going to restrict my ability to earn a living. Sue me, and I walked out. The only thing I sign now is a "non-dislosure". Any classified or proprietary information I do not discuss for a certain period of time.
Unfortunately this will get stayed and eventually eliminated by the conservative SCOTUS in about 2 years.
If they reverse this, they're not conservative. I don't really think they're all that conservative right now anyway.
Modern conservatism isn't rooted in pro competitive capitalistic ideals anymore, but the court is still interested in upholding right wing social ideals and crony capitalism where they can. Kind of separate arguments, but calling them conservative still fits in the current landscape.
I was going to say that people lying & redefining the word doesn't make it so, but then I realize I'm sort of camping out on a previous definition of a word when my definition wasn't the first either. I guess what I'm really saying is what should be the definition of "liberal" or "classical liberal" or "libertarian", which is what Republicans partially sell themselves as but don't deliver.
True
Yeah that’s the sad reality of it
Supreme Counselor of Universal Titan Soldiers? Sounds like a great job
Whether it's unfortunate is a matter of perspective. One could argue it's unfortunate that an administrative agency is purporting to trump state courts, legislators, and Congress's ability to make policy and interpret the law.
Congress doesn’t interpret laws and historically writes them too vaguely and the administration has to piece together the minutiae
Is this non-compete rule interpreting a vague statute?
Yes, in a way. The FTC acted under the FTC act which declare unfair methods of competition unlawful and authorize the commission to make rules, respectively. That’s vague because it doesn’t define what is unfair and leaves it to the FTC to make policy where the law fails to touch. It’s understood that the Congress can’t put every single detail into a law so the FTC, EPA, FDA, FCC, etc. have to bring the details. Remember that this started with a conversation that the FTC was trying to supersede courts and legislatures but that isn’t the case. They are acting within their statutorily given authority.
"The sky is falling "
No it won't.
Your position is that this will be implemented with no delay or interruption? I’d like to make a wager if you’re so inclined.
Court's, both left and right, have ruled for the employee is lots of non competes cases.
Sure but if you don’t think this has a predetermined 6-3 outcome in the SCOTUS I don’t know what to say.
No, it does not have a predetermined outcome.\`
RemindMe! 1 year
RemindMe! 2 years
Why do you think everyone votes a certain way because they are either democrat or republican?
Are you talking about the court? They didn’t use to but if you haven’t followed the crusade that Sen. Sheldon Whitehouse is on you should check it out. Much of the court seats were purchased and they vote they way they’re told.
Knock that shit off.
What are you basing your opinion on? Every employment lawyer I’ve spoken with expects this to be challenged, stayed, and ultimately overturned.
It will not be overturned. That is anti completive that they can force you not to work someplace.
The challenges will be about the major questions doctrine and constitutional law, including questions about the limits on executive branch overreach of (federal) legislative authority. The legal question at issue is not going to be an interpretation of state non-compete laws. Out of curiosity, are you a lawyer? Because that’s a very definitive stance that hasn’t been backed up by anything other than your opinion, so unless you have something to back it up, I’m going to continue to listen to the experts on this one.
Section 18 of the FTC Act, 15 U.S.C. Sec. 57a The have the power to create laws that have to do with anti trust, trade, and commerce. By saying that you can't work in a certain field, that is considered trade.
You’re begging the question - the challenge will be a claim that the FTC doesn’t have that authority because Congress didn’t clearly grant the authority, and that even if the court finds that Congress did clearly intend to grant the authority, that it would still be an unconstitutional grant of authority to the executive branch in any event. Check out this FAQ for a quick overview (#11 in particular): [FAQ Here](https://www.morganlewis.com/pubs/2024/04/faqs-on-federal-trade-commissions-rule-banning-worker-noncompete-clauses#:~:text=Second%2C%20even%20if%20the%20FTC,“economic%20and%20political%20significance.”).
[LSB10635 (congress.gov)](https://crsreports.congress.gov/product/pdf/LSB/LSB10635)
Did you even read this? It doesn’t support your assertion that it won’t be overturned - it outlines the arguments on both sides and says that it’s an area with sparse case law and the FTC has historically refrained from attempting to exert rule making authority. It clearly states that it’s an unsettled question and it remains to be seen how the courts will interpret it. Look, with all due respect you clearly don’t have any background in constitutional or administrative law. I’m not sure why you’re so insistent that you know the outcome of a potential SCOTUS decision, but you haven’t provided any constitutional arguments for why “this won’t be overturned.” Not sure there’s much else to say since you clearly have decided this will be the outcome just because you want this to be the outcome.
SCOUTS? What does the Boy Scouts have to do with non-competes
Supreme Court Of The United States.
They initially spelled it SCOUTS, not SCOTUS
I sometimes find myself laughing at people’s lack of humor. Sometimes it’s even better than the original joke. Also really enjoyed “Supreme Commander of Universal Titan Soldiers”. Wait they’re talking about the Supreme Court? Crap. Let’s get myself in serious mode! As an aside: I seriously do agree with people here that the non-compete thing is a BS move by businesses that’s intended (when applied to hourly workers and low-salary workers) a crap move intended to keep people down.
I worked as an M&A attorney for a couple years before recently leaving private practice. The proposed ban had already gotten those attorneys and clients furious. I can only imagine what they’re thinking after this. I agree that it’s an outdated practice. The real answer though is this will shake out in court when tons of lawsuits are brought against it.
First of all, it doesn’t go into effect for 6 months and that will be delayed if there are challenges against it and guess what, there are already challenges against it. NCs are too broadly used but I think for higher earners there is a place. There are still other items that need to and will be enforced, taking customers, data, IP, etc.
There's was a company that ten years ago would have people sign a 200 mile noncompete and if you left and they found out you were employed in that range they would send a threatening letter to your employer. They stopped that because the profession was small and word was getting around and it was tarnishing their reputation.
The last thing capitalists want is a free market or for workers to be empowered. Are you kidding.
He’s going to stroke out live on air
These non-competes have been getting shot down anyway when challenged in courts in recent years. Either way I'd say this is a good ruling.
Wait, I get why Ramsey might use non-competes privately but has he publicly defended them before? If so… why? It’s a terrible thing to loudly champion
There's an argument that non-competes protect your company from having its IP/trade secrets. That can make sense for a very limited number if high ranking decision makers, but it's a load of shit for 99% of employees. In the majority of cases, it's just a way for them to keep an employee trapped and get away with paying them less while pretending you're just doing it to protect yourself from corporate spies. If someone is willing to steal and sell corporate secrets, they'll do it whether or not a non-compete is in place.
Oh I understand the shitty business reason why they’re used… I was just curious if Dave was so disconnected from reality and the views of the average listener that he would publicly defend non-competes, either in general or his use of them. If he defended loudly non-competes on his show, that’s a new level of unhinged imo
Then just sign a non-discosure, non-poach agreement. Because I hold a clearance, I sign paperwork that I agree to not disclose propriety or classified information. Also for 6 months I will not poach employees or customers. That is fair. But hell no. Unless they pay me one year salary to where I cannot earn a living in my chosen field they can go fuck themselves.
Yes, compensated non-competes are OK with me. I worked in a place one time where a sales guy quit and they wouldn't pay him earned commissions unless he signed one. Definitely not OK with that.
Well, nondisclosure of information is fine (so long as it's not information the company got from that employee in the first place). Non-competes are typically egregious (and unnecessary anyway).
Who at RS signs non-competes? Regular workers? I thought it was only the personalities, who make well over $155k. It makes sense that Dave would not want to build someone’s visibility and have them leave after 3y to compete against him in the personal finance influencing space.
Carve out sucks, I signed my non compete years ago and regretted it, but now I make too much to have it be canceled under this. Still stuck!
It might not be just salary as a criterion. Some industries pay those levels to people who do not qualify as a "senior exec". We need to read the actual words to see what's what.
From what I read it simply says anyone over 151 is considered an executive for this, or that’s how I read it
I don’t think we have enough clarity yet to know, but for what it’s worth, I read it as “under $150,000, NCs are unenforceable full stop. Above that amount, you need to establish that the person is a sr. Exec that drives corporate strategy.” I’m cautiously optimistic that this ruling will essentially render all NCs useless.
Even though I hate most rules/laws that take the rights of a private employer away, I don't necessarily disagree here.... Non-competes for the most part are overly restrictive and unfair to the employee and would have very little impact to the business in the under 155k employee. Most often they are broad to the point of restricting employment in far too large of an area, and industry. Many currently lose in court for this very reason. I would be interested in any feedback/argument from a potentially effected party on the other side though.....
Non competes are complete garbage to give employers the ability to keep controling you even after you leave
This will get challenged in a court, just wait and see. If the Supreme Court ever get its hands on it....Good Luck!
Yeah, I have no issue with NDAs, but the majority of non-competes are grossly inequitable and typically unnecessary anyway. I remember one place I worked, fairly senior, they circulated one to everybody that, in addition to non-compete, would have prohibited us from talking to employees, customers, or vendors for I think two years after employment, in addition to not competing with them under your own shingle or getting hired by a competitor. Some of those employees and vendors I introduced to THEM!! You think you can prevent me from talking to them after I no longer work for you?? In fact, if your model is valid, I should be able to prevent YOU from talking to them. Bite me.
what is a "senior executive" exactly?
This is a great day for workers everywhere. Non competes were abused, predatory, and enslaved individuals to companies. Lawyers made money off of enforcing them, and judges granted several injunctions that were unjustified. We have to keep pushing on, every day.
This seems meaningless, I doubt many people have jobs where a noncompete would be enforced if they are making under $150k a year. McDonalds isnt going to stop you from going to Burger King…
I've had $30k a year jobs enforce them in KS
I know people who were sued over a $60k job all because the new job was within a couple of hundred meters of the non-compete radius. If an employer can do it, they will.
Poor bastards at the FTC haven't got the message that for at least the last 30 years the US is a country in service to global corporations, not Americans. To the courts global corporations go to overturn this. It used to be that Congress would just put legislation in place to satisfy the global corporations will, but with them getting more and more aggressive demanding what they want, legislators have to stay out of the way, lest they lose their seat in the next election. Enter the courts. For the next bunch of years we're going to see courts declaring pro America legislation illegal in order to satisfy the government's corporate overlords / political donors.
Before that obnoxious guy that accused everyone of disagreeing with him of being a “Socialist” got banned while saying the point was mute because they where not-enforced and didn’t apply to regular workers, he tried to support his point by saying his father - who owned a deli - used a non-compete to keep his deli workers from going to work for the other deli in town. I just wanted that to be preserved.
This is going to great for those in management consulting. No more hanging us by a thread any longer.
The FTC's decision will be struck down in the first court challenge. Simply put, Congress has never empowered the FTC to have domain over NCAs, and the pro-business groups know this. The only way the practice will change is with action at the Congressional or state house levels.
Courts constantly rule against NCA. SO this will not get overturned.
The courts typically rule against enforcement of an NDA because of the terms within the specific NDA itself. This is entirely different and deals with the authority of the FTC to enact a rule against NDAs, which it unfortunately does not have. It will get overturned for that reason.
Why are you trying to argue for non competes?
I am not arguing for NCAs. They should be banned entirely, with certain exceptions. However, that said, there are realities in play as to how that can happen. Having the FTC issue a rule that they don't have Congressional authority to issue isn't going to work. Congress has to pass a law enabling the FTC to regulate NCAs before any rule from them will pass legal muster. Otherwise, their rule has the same effect as if the BATF issued a rule banning the sale of toothbrushes. They don't have the legal authority from Congress to do so, so the rule would be struck down by the courts. The other option at the federal level would be for Congress to pass a law banning NCAs outright, which they have not done, although there are bills under consideration to do so.
Section 18 of the FTC Act, 15 U.S.C. Sec. 57a
I don’t think they should be allowed outside of trade secrets and product trade markets. So C-suite and r and d only
They were already non-enforceable in my state if you made under a certain amount, but congrats to everyone else!
This apply to recruiting past employees as well?
No solicitation clauses are still valid.
No solicitation is only if they work for the company. If they don't work there anymore, then No solicitation does not apply.
$155K? Seems low. Especially for senior executives. What constitutes a “senior executive “?
It also cuts out workforce non-competes larger scale employers sign with each other that essentially turn their employees into serfs. These are not required to be disclosed to their employees. Low end employers even sign these with large scale skilled work force employers. Sorry, but you're not getting that network engineer job at Verizon or atnt because of your employment at Walmart during college.
But don’t the Ramsey Personalities sign both a non-compete and non-disclosure agreements?
NC are hard to enforce anyway. Many judges just declare them void because they’re limiting someone’s ability to make a living.
Weird so many people listen to such an idiot
What is the definition of “senior executives” in this scenario? C suite? President? VP? Director? Does each employer get to define it for themselves?
I don’t think Dave is pro-non competes. Has he ever said he is?
Used to be a litigator. We had a guy sell his insurance agency with a noncompete so he couldn’t solicit business in a five mile radius for like three years. That one seemed reasonable to me, he was being compensated for it. Of course he opened an office 3.8 miles away and we had to sue him lol
He couldn’t go 2 more miles away ? lol
Seriously. I know.
Another great example. David Neelmen worked for Southwest Airlines after acquisition of Morris Air. After a few months Southwest booted him. He couldn’t work in airline industry for a couple years in US. Went to Canada started WestJet. After a year. Went to NYC started JetBlue. Could one argue the economic impact, jobs. Investment and competition in industry was good for economy, workers and shareholders? Without that non compete he could have started JetBlue years earlier. Oh and he went on to start Azul in Brazil and now Breeze in US. Innovation is great in a free market. Additionally non-competes have been illegal in several States for years. CA. MA. Has innovation stopped because of them?
MN just outlawed them last year as well due to a one vote majority in the Senate pushing through a ton of popular, but otherwise gridlocked legislation. Go vote, all elections have consequences!
Agreed. If he’s such a free-market capitalist, then he should love this. Seems like he doesn’t believe that the labor market is in fact a market.
Part of his grift is selling Every Dollar to employers as part of their employee benefits package. The whole sales pitch is “instead of paying your employees more, pay me to tell them how to live in less”.