FTC Announces Rule Banning Noncompetes

[Sanders]

I've never liked non-compete agreements, and always believed they were wrong to tell someone they could not work in their profession if they went to work for the competition, or started their own company.

Now, if they steal trade secrets from their previous employer, that's a different situation altogether.

Non-compete agreements have never been enforceable in court, but that never stopped companies from using them.

Today, the Federal Trade Commission issued a final rule to promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” said FTC Chair Lina M. Khan. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”

The FTC estimates that the final rule banning noncompetes will lead to new business formation growing by 2.7% per year, resulting in more than 8,500 additional new businesses created each year. The final rule is expected to result in higher earnings for workers, with estimated earnings increasing for the average worker by an additional $524 per year, and it is expected to lower health care costs by up to $194 billion over the next decade. In addition, the final rule is expected to help drive innovation, leading to an estimated average increase of 17,000 to 29,000 more patents each year for the next 10 years under the final rule.

https://www.ftc.gov/news-events/news...ng-noncompetes

[aviator]

It's a double edged sword. As an employer if I hire and train an employee on something really valuable for my company I wouldn't want that person to walk away with my knowledge and become my competition, however you do not own that person, they should be free to do whatever they wish with their life, now as far as stealing clients lists, trade secrets and other information that's a whole different story. I have trained a lot of Realtors, some left and became brokers and run their own companies, others are just salespeople for larger companies, that's fine, they paid their dues I made money from them and they are free to go, salespeople are not employees, they are independent contractors but don't take my client mailing lists or I'll sue.

[JD Miller]

Fuck the Federale Trade Commission and their commie rules

[4thIDvet]

Originally Posted by JD Miller

Fuck the Federale Trade Commission and their commie rules

No JD read aviator's post he explains it pretty dang well.

"they are independent contractors but don't take my client mailing lists or I'll sue." aviator.

'Now, if they steal trade secrets from their previous employer, that's a different situation altogether.' Sanders.

My X worked for a major ski area in Vermont and had a great job. $$ She created and used their lists of people interested in coming to the area for recreation and possible use of the companies hotels for her new business. Lots and lots of peoples.
She left and started her own real-estate business and did very very well. $$ How? She took the companies lists of people and solicited them with offers of better hotels then worked on them to buy properties from her. Whooops.
The company caught on and sued the dog piss out of her. That and patent infringements etc. it appears is what their trying to stop?

[MrKalashnikov]

I was sued in Federal Court over a non-compete contract back in 2000 when I left my corporate job to start my own company. I was lucky to have a friend who was a senior partner in a big Chicago-based law firm. He personally represented me and it never went to court. I settled with the jagbags who were trying to put me out of business. I had the last laugh though, my manager and the VP of sales were both fired for malfeasance & theft of company funds a couple of years later. I had a great run for almost 24 years running my own show and making good $$$$. My old employer was bought out in 2006 in a hostile takeover and is basically defunct today.

[aviator]

Yeah it all depends on how the agreement is spelled out, if it includes trade secrets, clients lists etc it becomes a different animal. I'm sure some of our members from the legal department will chime in on this. They know more about it than we do.

[Johnny]

Originally Posted by MrKalashnikov

I was sued in Federal Court over a non-compete contract back in 2000 when I left my corporate job to start my own company. I was lucky to have a friend who was a senior partner in a big Chicago-based law firm. He personally represented me and it never went to court. I settled with the jagbags who were trying to put me out of business. I had the last laugh though, my manager and the VP of sales were both fired for malfeasance & theft of company funds a couple of years later. I had a great run for almost 24 years running my own show and making good $$$$. My old employer was bought out in 2006 in a hostile takeover and is basically defunct today.

For almost 4 years, I was an inside sales guy for a small company. I liked the job and did well. Unfortunately, the company eventually went under due to gross mismanagement. About a week after the company closed, I receive an angry call from my former boss accusing me of stealing the company's database and threatening legal action.

I didn't know what to do, so called one of my old customers who I was pretty close with. He was a local big shot who owned a very successful machine shop. He told me "Sit tight. Give me 24 hours and I'll call you back."

Almost 24 hours later he called me back. Apparently, he sicked his lawyers on my former boss, read him the riot act and threatened all sorts of action against him. You see, my former boss had a hand in essentially stealing tens of thousands of dollars from this customer by racking up bills and the filing for bankruptcy.

[500grains]

California has banned non-competes for decades, and that policy helped grow the tech industry.

I think employers should motivate employees to stay with good pay and stock options rather than with threats of a lawsuit.

Taking trade secrets upon departure remains a big No-No. But what many employers consider to be trade secret is not legally protectable because it is not actually secret.