FTC Crackdown on Non-Competes
6 January 2023
The FTC is cracking down on noncompete agreements. Will this impact you?
As this article
explains, the Federal Trade Commission has begun its crackdown on noncompete agreements, just as they proposed a rule to ban them entirely in the future.
In my opinion, noncompete agreements only belong in the realm of Sr. Management. Besides almost being universally unenforceable for most employees/positions, they are likely going to be made illegal in the near future based on these recent rulings.
Attempting to prevent line-level employees from working for competitors who are paying more, or even from starting their own business, serves no practical purpose other than decreasing trust and confidence in your brand and has people looking at the door earlier than they should want to!
If you have employees sign noncompete agreements, reach out to us to discuss whether it's a valid practice for your specific situation, or if you may want to change how you do business before it gets you into trouble.
By the way: Non-Solicitation agreements are NOT being targeted with this move. Customer lists, marketing materials, etc. can be counted under proprietary company property that your policies should have listed as "required to return upon separation for any reason." Use of said stolen property to sabotage an ex-employer is MUCH easier to enforce than "don't be a tech for 2 years."
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