FTC talking about outlawing non-compete clauses

Right. Exactly why they should end. It's an unequal relationship. An argument can certainly be made that the employee should put non compete language into their calculus when weighing employers, but the reality is they don't, while employers totally get it.

Non-solicit - fine. I got no problem with that. NDAs, IP restrictions - fine. But non-compete are archaic and cruel. Courts are realizing this and that's why we're here.

 

Yeah because people follow their sandwich maker like the do their Doctor…

 

I worked for one ER group about 20 years ago they tried getting the PA’s to sign no competes. The 8 of us got together and said no way.
It was a ridiculous idea that we would be able to leave an ER group and have any significant number of patients “follow” us.

Needless to say the group dropped the request they were going to be able to fire the entire staff of PA’s

 

Like that has anything to do with it. First of all I posted an example of Jimmy John’s having a non compete clause so it does happen. You know why? All employers want control over their labor force in that they want to be able fire them at will but also prevent them from leaving if they have any kind of agency.

 

Sorry man I’ve never heard of low skill labor having non compete clauses I guess you can find some rare examples.
Most no competes are to prevent and employee from taking clients from one business to another or protecting trade secrets.
Now certainly a sub shop may have some “trade secret” but I high doubt if they fire a dude they will give a crap if he goes to the next sub place down the road.

If they are like what you are suggesting (can’t get another job within 2 miles) it still is nothing like no competes for Doctors, Tech guys and lawyers(if they even try to do that).

 

I had a case with a plaintiff trying to enjoin a former employee that was essentially a receptionist/assistant. Quick evidentiary hearing, and the Judge found the facts didn't support enforcement. If I recall correctly, our client was only able to hire counsel because her new employer paid for it.

 

You are in healthcare no? Maybe you havent heard of it in other lines of work because you arent in those lines of work. If you hire labor, your motivations are the same whether its cheap or expensive. People have to be trained and then become integral to your operations and once they are they are a pain to lose. All that training you gave them also makes them more desirable to other employers competing with you too, so the incentives create themselves.

 

They don't.

 

I know for a fact they are enforced in Missouri (or at least an employer is willing to fight it in court). I know a doctor through work that’s suing his former employer so he can work in STL but in the meanwhile has another position outside the geographic exclusion while the case proceeds.

 

A non-solicitation agreement and an NDA cover what you claim non-competes are meant to cover. Non-competes are generally used to stifle competition and prevent talented employees from leaving. Paying them well and giving them equity are fairer ways of accomplishing that.

I only support non-competes when buying a business, product, technology, etc. but that exception is in this proposed rule. It’s a bit too restrictive if passed as-is but so be it.

 

Although it may no longer be the case as the result of an Executive Order signed by Biden in 2021, noncompete clauses were even applied to fast food workers and the reason had nothing to do with protecting trade secrets but much more so was based on an industry-wide policy to suppress wages.
Opinion | Why Are Fast Food Workers Signing Noncompete Agreements? (Published 2021)

 

Agree with this.

We have a non compete for our associate. We could certainly have drawn it more restrictive. Unfortunate it needs to be done. But it is part of protecting your business and the employees working for you.

With that said…Our associate actually came from the other side of town. They had a non compete with a doctor they started with out of school. They then then sold the practice to a semi corporate company. And they never had her sign a contract. They just kept paying her as she used to be paid presumably. Even with that…when she made the decision to leave and join our practice she did the noble thing and followed the contract she had signed when she started even though technically she could have started her own place right next door as the information we have is there was no assignability clause. Needless to say we were outside the restrictive covenant by a few miles. But they tried to make her life miserable. And she even worked beyond the 90 days she did not even have to do in order to help them out. We never marketed her joining us outside a FB post that showed a picture with my wife’s name and her name saying exciting news to come. They eventually sent us a letter claiming some nonsense so it cost us $1000 to have our attorney draft a stern response letter letting them know the law and that we will sue for attorney fees if necessary. That pretty much ended their intimidation. Felt bad for our associate that she had to deal with that. But part of being a doctor for sure.

The goal for us and the restrictive covenant is to protect our employees and the business but not keep our associate from pursuing other endeavors in the future.

 

Well that’s just silly.

The fast food worker should not sign it, it’s not like there are a million fast food jobs they can go to.

 

Cmon man… the worker is a Sandwich ARTIST. My particular SandArt ( what they like to be called) is name Dominique and she started her SandArt internship at the lowly subway down the road. She was a little embarrassed to start at the equivalent of FSU in the sandwich world but she learned a few skills, learned a few moves. Firehouse Subs lured her away with a nice signing bonus free food on her lunch break and .20 cent raise. Firehouse is where I met Dominique. She melts the provolone PERFECTLY.
Since firehouse I have followed her across the town. She had a short stop at Quizznos where she learned advanced bread slicing, and veggie layering. Got picked up by Jersey Mikes (when Quiznos shut down.. CoVid…) where she learned how to use the latest register and Apple Pay. She is now at WhichWich. Head Cashier and Shift manager. The way she constructs a sandwich, just the right about of oil and vinegar, limited olives,… she layers the meat crisscrossing the grain so every bite is tender and chewy…
Yeah.. I’ve followed her for the last 4 years and am so happy I did.

 

That was my concern. While the Jimmy John’s post up thread caught a couple of funny ratings, it’s more than likely for management than the sand which makers. I was a restaurant manager for nearly 20 years and had to sign multiple non-compete agreements for different fast casual chains. I was advised that they were not enforceable, but my concern was what if they try. That’s great that I can beat it, but who has the time, money, desire, the fight it if challenged. It would also probably be a bad look with the new employer if I needed time off right after starting for court.

 

A lot of these restaurants do a large percent of their business in catering. You’d better believe when I changed jobs I contacted all of my best customers. With something like catering, my new restaurant didn’t replace the old one entirely for all of their catering needs, just got worked into the rotation, so they used both. I definitely cut into their earnings though. Having a couple of big customers order once a month instead of once a week like they had been could make an impact if scaled enough.

Funny side note. The first one I had to sign was created after I had been with the company for a while. They made us sign it to keep our jobs. That in itself made it u enforceable. They also forgot to lock the word document when they emailed it out. My coworker and I made some creative edits, deleted a few paragraphs we didn’t agree with, then signed it.

 

This is true. I would have no problem if employees were given a way to report frivolous claims made by employers and have an arbiter that could return them their costs. I
Part of me says they should be able to get pain and suffering with it. Personal after watching our associate deal with a claim where the semi corporate I think had a family connection that just sent frivolous threats to her. She had to spend way too much money and deal with unnecessary added stress after she literally went above and beyond her obligations based on a contract that was not even enforceable against her.

I am not a lawyer but feel her attorney could have done a better job from the start to represent her. When they send us a letter accusing us of some nonsense and I forget the code in Florida but we had our attorney send a stern letter saying that we would be fighting for attorneys fees if necessary. If memory serves me correct it basically said we will not be communicating unless you can prove we did something (which we had not) and if we end up in court we will fight the frivolous claims. I don’t know for sure but the feel I got was her attorney did not handle it quite as stern leading to extra communication and billed hours for them. That is just my perception.

Our associate had to put out a retainer and everything. For us it was a 15 minute phone call to explain the situation and our attorney billed us at the end of the month after the letter was sent.

 

But the fear of a lawsuit paralyzes a lot of people.

 

A friend of mine worked for Stryker & had a 1 year non compete contract. He went to a competitor & they offered him a raise & agreed to pay him for a year to sit on his ass. I oppose hurting labor like him!

 

I didn't know this was still going on. Vote is this afternoon. Going to be interesting litigation if it happens.

https://www.npr.org/2024/04/23/1246430110/noncompete-agreements-ftc-ban-lina-khan

After receiving more than 26,000 public comments, the five members of the Federal Trade Commission are set to vote Tuesday on whether to issue a final rule banning noncompetes, declaring them an unfair method of competition.

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"The freedom to change jobs is core to economic liberty and to a competitive, thriving economy," said FTC Chair Lina M. Khan in a statement when the proposed rule was first introduced. "Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand."

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One case involved a single father working as a security guard who was forced to resign his overnight job that paid $11 an hour after he lost access to nighttime child care. He landed a similar job with daytime hours that paid $15 an hour, but his old employer challenged his employment based on a noncompete he had signed, and he was fired.

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The FTC's proposed rule did include a notable exception for noncompete agreements between sellers and buyers of businesses, meant to protect the value of the businesses being acquired. The two sides could still enter a noncompete agreement provided the seller had at least a 25% ownership interest in the business being sold.