Podcast: FTC Moves to Ban All Noncompetition Agreements Nationwide

Unknown: 0:27Hey, it’s mark here and welcome to the next edition of the Employee Survival Guide where I tell you as always, what your employer does definitely not want you to know about and a lot more. It’s Mark here and welcome to next edition of the employees of ABA guide. Today’s topic is going to be how the federal government banned non compete agreements for all employees nationwide. In an anticipated in crushing blow to all employers nationwide, the Federal Trade Commission on January 5 2023, issued a proposed rule that would forever ban non competition agreements in employment for an estimated 160 million working Americans. Employees have suffered needlessly for far too long under these oppressive and one sided employment agreements that benefit only employers. I’ve spent my entire legal career voiding these default employer agreements and on behalf of all employees hasta Lavista baby. But employees and executives will need to be patient as lobbyists and pro employer groups will mount an extensive and legal campaign to overturn the proposed rule. And you should expect this fight to go all the way to the US Supreme Court. This battle is about corporate profit and greed. Nothing more and nothing less. Employees can weigh in to and cast their ballots in favor of the proposed rule. The FTC has opened the nod to the public comment section on their website on the proposed rule for 60 days. And I encourage all employees and executives to send in their stories about their how their non compete agreements ruin their employment prospects and wages. Working according to the FTC, an estimated 30 million employees are currently bound by noncompetition agreement. Quote, a non compete clause is a contractual term between an employer and a worker that blocks the worker from working for a competing employer or starting competing businesses, typically within a certain geographic area and period of time after the workers implement ends and quote, the FTC has rationale offered in support of this gargantuan leap forward for the rights of American employees is, quote, non compete clauses prevent workers from leaving jobs and decreased competition for workers. They lower wages for both workers who are subjected to them, as well as workers who are not in quote. The FTC estimates a ban on non competition agreements would raise employee wages to 250 billion to $296 billion per year, while at the same time, concurrently stimulating the economy and providing an increased tax revenue for the US Treasury. I also estimate the employees and employers would save more than a billion dollars annually on legal fees fighting for and against enforcement of noncompetition agreements in courts. I derive this number from the roughly 4000 members of the National Employment Lawyers Association, which I’m a part of, and assuming that each lawyer handle about five cases per year, and it’s a very conservative estimate, but you get the picture. Who in the right mind would oppose this proposed rule to ban non compete agreements? Employers nationwide both small and large. However, no fair minded employee or executive will stare you in the eye and convince you that this new proposed ban on non competes is wrong for them individually and wrong for the country. I say this because I represent both employees and executives. I have never had a client state the non compete agreement was something they had asked for, nor something they ever wanted. A non compete in its essence seeks to deny employment income to employees, and in the executive situation forces a forfeiture of incentive compensation. She has rightly and honestly earned through her tenure of service to the company. Now the proposed rule, the rule defines unfair competition as follows. It is unfair methods of competition for an employer to enter into an oran tempt to enter into a non compete clause with a worker maintain with a worker a non compete clause or represent to a worker that the worker is subject to a non compete clause where the employer has no good faith basis to believe that the worker is subject to an enforceable non compete clause and quote, the barrel rule goes on to further state and existing non compete agreements will be voided as of the date effective date of the proposed rule, and employers must notify existing and previous employees within 45 days that the non compete agreements they had are no longer valid. The proposed rule would apply to a wide range of class of employees, employees and independent contractors X turns, interns volunteers apprentice and sole proprietor it The rule doesn’t apply to franchisees in the context of the franchisee and franchisor relationship, but not including the workers who work for the franchisor which think about like McDonald’s and Burger King. non compete agreements are created by employers for employers. Employees never had a real chance to negotiate these agreements. We have written extensively about this topic before in our website. noncompetition agreements serve no valid reasonable purpose to protect the interests of employees only employers noncompetition agreements are an overreach for employers by employers whose interests are already protected by confidentiality and proprietary information increments they have employees signed at the start of their employment. Employees say that non competition agreements protect the competitive advantage they have created their trade secrets and their corporate potpie dietary information. This is a lie told to you repeatedly by the pro employer lobby groups and the defense bar that support them. Employees are now restricted from gainful employment more than at any time in the country’s work history to their financial detriment. How did employers cause this calamity? The facts are simple to understand, no one noticed no one notice a widespread use of a default employment practices covering 30 million employees. According to the FTC, no one noticed the financial cost to employees until today. Employees are not organized in politics and sought sought only to align themselves with a pro business lobby or as such as the Chamber of Commerce and the Society for Human Resource Management. It is exactly this decentralized and unorganized nature of non unionized employees roughly 160 million strong that employers across the spectrum abuse and mystery employees and executives alike with noncompetition agreements. How certain am I of this fact? Because I watch the endless flow of noncompetition cases come through our offices. In each case we have litigated the employee never negotiated the non compete agreement had no say in the matter was told to sign the sham deal or lose the job opportunity even while they were still working. These default employment practices have to stop they are abusive and restrict trade in the US economy. This is not a political issue, and neither party can claim it as a weapon. company’s largest small run or owned by members of both parties use non competition agreements. Employers who forced non compete agreements on employees derive the same financial benefit, which is profit and competitive control of the labor market at an enormous expense to individual employees. That’s a big deal, folks. The FTC proposed rule ban on non competition competition agreements marked the beginning of the end of abusive management practices that has enveloped the nation’s workforce since the big founding of this country. Yes, that is exactly how long employers have used noncompetition agreements. Other onerous default management practices such as forced arbitration, which is now prohibited and sex discrimination cases, forced confidentiality of settlements, lack of employee privacy, lack of freedom of speech at work in the private sector, and the ubiquitous implemented will rule all strip employees of basic civil rights and negotiation power, and in some instances, create or promote discrimination. Employees are indispensable to the operations have profitability of all companies, both private and public. Employers dehumanize human employees down to their human capital quotient for capitalism purposes, we should all be more mindful not to break the clicker backs of our nation’s workforce, and recognize them for what they really mean to our economy as a whole. Without them, there are no companies. Without them, there aren’t No, there is no economy. We need to bring more fairness and transparency to the workplace. Thank you for listening. And I’ll talk to you next time. If you’d like the employees to have a guide, I’d really encourage you to leave a review. We try really hard to produce information to you that’s informative, that’s timely that you can actually use and solve problems on your own and at your employment. So if you like to leave a review anywhere you listen to our podcast, please do so. And leave five stars because anything less than five is really not as good, right? I’ll keep it up. I’ll keep the standards up. I’ll keep the information flowing out you. If you’d like to send me an email and ask me a question. I’ll actually review it and post it on there. You can send it to mcarey@capclaw.com.