Feds Ban No-Compete Clauses For Almost ALL Jobs in US
In a move that will shake up the business world, the Federal Trade Commission has narrowly voted to do away with no-compete clauses in the workplace.
No-compete clauses prevented workers from going to work for competition
As a radio- media worker, I am well aware of no-compete clauses. Many radio and TV personalities have them. Many radio morning show personalities have a no-compete, so they won't 'jump ship;' and go to work for a direct market competitor.
Some no-compete clauses are end-dated, lasting anywhere from three to six months or longer.
A no-compete clause prevents a worker from leaving one business, and immediately or directly going to work for a competitor or even launching a competing business of their own. Most non-competes are confined to the city or geographical area where the person lives or works.
But now, they are all but gone. According to NPR by way of the FTC:
"The FTC received more than 26,000 public comments in the months leading up to the vote. Chair Lina Khan referenced on Tuesday some of the stories she had heard from workers."
She said the testimony from about 26,000 workers nationwide who are opposed to the clauses indicated many were trapped in their jobs, they had more lucrative opportunities but couldn't take them. There will still be exceptions to the ban, but they will be largely confined to upper-level management or jobs where the worker had a specific contract in place, for example, the CEO or leader of a business or industry.
Otherwise, workers will be free to pursue any job they wish at any time. The ban will go into effect later this year. The FTC estimates about 30 million American workers, or 1 in every 5, have some sort of no-compete clause.
The US Chambers of Commerce said they would sue to overturn the ban, claiming it was a power grab by the FTC. Supporters say it gives workers the freedom to pursue better jobs and could boost salaries by as much as $300 billion.