FTC talking about outlawing non-compete clauses

I'm not defending non competes.

I'm advocating for thr rule of law.

FTC doesn't have the authority to interpret the law. That's the province of the Judiciary.

Making such a sweeping ruling with such broad substantive application is clearly a usurpation of the legislative and Judicial province.

Why not petition the SCOTUS for a ruling?

Why that would be respecting the rule of law, and yielding to balance of powers.

You. Know. This.

 

Let’s look this up then.

“The Federal Trade Commission Act is the primary statute of the Commission. Under this Act, as amended, the Commission is empowered, among other things, to (a) prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce; (b) seek monetary redress and other relief for conduct injurious to consumers; (c) prescribe rules defining with specificity acts or practices that are unfair or deceptive, and establishing requirements designed to prevent such acts or practices; (d) gather and compile information and conduct investigations relating to the organization, business, practices, and management of entities engaged in commerce; and (e) make reports and legislative recommendations to Congress and the public. A number of other statutes listed here are enforced under the FTC Act.”

Sounds like noncompete agreements, which are by definition and quite literally “anti-competitive” business practice are exactly up the FTC’s alley to set ground rules for. That doesn’t mean their rules are absolute and uncontestable, or that a particular rule couldn’t overstep their bounds - clearly the judiciary can look at any of their rules just as any dispute between any two entities, including govt agencies, can be taken to court by interested parties. But it *is* up their statutory wheelhouse. To suggest otherwise, is simply false.

 

My wife owns a print shop with roughly 75 employees. You all know that because most of my replies use her as proof rather than read articles that imply bias.

She has all employees sign an NDA to protect her from theft, which in the beginning happened quite often. I don't blame her since 100% of all her business' success is because of her and her ideas. She spent 16 years getting to this point sacrificing pretty much everything, from time, money and even blood. There was a time she worked over 25,000 hours in a 5 year period for free because she believed that one day her business would be successful. She has around 100 processes that she has spent a decade or more perfecting. The last thing she needs is have some low-life come in, learn them and then leave taking her ideas to the highest bidder and her industry is pretty cut throat. She has had products and processes stolen and many of her competitors have attempted to poach her employees. The NDA is the only thing that protects her for at least 2 years after an employee leaves.

 

Does this recent FTC ruling include NDAs? I've only seen reference to non-competes, which is obviously different.

 

Good question. I've read a few articles that keep using both. But she also uses non-competes to prevent the same issue with employees getting paid off by competitors to come work for them and bring everything they have about her business practices.

 

It does not by its terms

 

100% understanding and sympathetic to why she would use non-competes, I think you'd have a hard time arguing that it is not in fact "anti-competitive" in how she's using them.

As a different contractual incentive scheme than non-competes, she could alternatively drop hourly pay by $.50, offer a 1K sign-on bonus, and then have a clause requiring paying back that $1K if the employee leaves within 1 or 2 years. Just a thought/suggestion.

 

If what she is doing is truly her own idea and process, she can patent it. Out side of that, it sounds like she is training employees to complete tasks the way she wants them done, which is what all businesses do. Employees should also benefit and advance from their experience. I mean, has your wife ever hired an employee with experience? Did she start that employee at higher pay than a “green” employee? Why? Because there is value in what people learned at their past jobs … I bet she has also benefited from what an experienced employee can bring to the company. That’s just how business is.

 

Non compete clauses are a big thing in the insurance business. Captive companies use them with agents and of course they are used when selling a agency to keep someone from starting a new company and stealing the clients from the one they sold. I read where AIG just sued 3 prior employees that started a company of their own recently.

https://www.reuters.com/legal/litig...o-launched-rival-insurer-dellwood-2024-04-03/