Federal regulators on Tuesday [April 23, 2024] enacted a nationwide ban on new noncompete agreements, which keep millions of Americans — from minimum-wage earners to CEOs — from switching jobs within their industries.
The Federal Trade Commission on Tuesday afternoon voted 3-to-2 to approve the new rule, which will ban noncompetes for all workers when the regulations take effect in 120 days [So, the ban starts in early September, 2024!]. For senior executives, existing noncompetes can remain in force. For all other employees, existing noncompetes are not enforceable.
[That's right: if you're currently under a noncompete agreement, it's completely invalid as of September 2024! You're free!!]
The antitrust and consumer protection agency heard from thousands of people who said they had been harmed by noncompetes, illustrating how the agreements are "robbing people of their economic liberty," FTC Chair Lina Khan said.
The FTC commissioners voted along party lines, with its two Republicans arguing the agency lacked the jurisdiction to enact the rule and that such moves should be made in Congress...
Why it matters
The new rule could impact tens of millions of workers, said Heidi Shierholz, a labor economist and president of the Economic Policy Institute, a left-leaning think tank.
"For nonunion workers, the only leverage they have is their ability to quit their job," Shierholz told CBS MoneyWatch. "Noncompetes don't just stop you from taking a job — they stop you from starting your own business."
Since proposing the new rule, the FTC has received more than 26,000 public comments on the regulations. The final rule adopted "would generally prevent most employers from using noncompete clauses," the FTC said in a statement.
The agency's action comes more than two years after President Biden directed the agency to "curtail the unfair use" of noncompetes, under which employees effectively sign away future work opportunities in their industry as a condition of keeping their current job. The president's executive order urged the FTC to target such labor restrictions and others that improperly constrain employees from seeking work.
"The freedom to change jobs is core to economic liberty and to a competitive, thriving economy," Khan said in a statement making the case for axing noncompetes. "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."
Real-life consequences
In laying out its rationale for banishing noncompetes from the labor landscape, the FTC offered real-life examples of how the agreements can hurt workers.
In one case, a single father earned about $11 an hour as a security guard for a Florida firm, but resigned a few weeks after taking the job when his child care fell through. Months later, he took a job as a security guard at a bank, making nearly $15 an hour. But the bank terminated his employment after receiving a letter from the man's prior employer stating he had signed a two-year noncompete.
In another example, a factory manager at a textile company saw his paycheck dry up after the 2008 financial crisis. A rival textile company offered him a better job and a big raise, but his noncompete blocked him from taking it, according to the FTC. A subsequent legal battle took three years, wiping out his savings.
-via CBS Moneywatch, April 24, 2024
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Note:
A lot of people think that noncompete agreements are only a white-collar issue, but they absolutely affect blue-collar workers too, as you can see from the security guard anecdote.
In fact, one in six food and service workers are bound by noncompete agreements. That's right - one in six food workers can't leave Burger King to work for Wendy's [hypothetical example], in the name of "trade secrets." (x, x, x)
Noncompete agreements also restrict workers in industries from tech and video games to neighborhood yoga studios. "The White House estimates that tens of millions of workers are subject to noncompete agreements, even in states like California where they're banned." (x, x, x)
The FTC estimates that the ban will lead to "the creation of 8,500 new businesses annually, an average annual pay increase of $524 for workers, lower health care costs, and as many as 29,000 more patents each year for the next decade." (x)
Clearer explanation of noncompete agreements below the cut.
Noncompete agreements can restrict workers from leaving for a better job or starting their own business.
Noncompetes often effectively coerce workers into staying in jobs they want to leave, and even force them to leave a profession or relocate.
Noncompetes can prevent workers from accepting higher-paying jobs, and even curtail the pay of workers not subject to them directly.
Of the more than 26,000 comments received by the FTC, more than 25,000 supported banning noncompetes.
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Playing BG3
Me: Why does Astarion always disapprove when I do something to try and help out victims of slavery or when I do things specifically to uplift people who are victimised by groups and people more powerful than them? You'd think of ANYONE he'd be the guy most in favour of that sort of thing.
The little fairy that lives in my head and talks to me sometimes: It's because you are challenging his warped worldview that only the strong have power and without power you can only be a victim and you are stressing him out by showing him his perspective forged out of decades of abuse of every kind is incorrect and it's making him question if, maybe, how he was treated was unfair and avoidable.
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Prompt 102
Bruce pinched the bridge of his nose, taking a deep breath. In for ten seconds, out for eight. Alright. Okay. “Let me get this straight,” he didn’t motion to the three teens- or not teens even if two apparently looked like they were- but it was a close thing. “You-”��
Phantom perked up, white hair flickering with what he was pretty sure were stars as they turned away from the window looking out into space. “-are two years old.” The fae-esque being who looked more like a fourteen year old gave a half-distracted nod. Which, for a toddler, they were paying attention pretty well.
“You-” Klarion looked up from where he was fiddling with the cuffs that had been on him, cat sprawled on his shoulder now that it was out of the carrier. “-are six?” Another distracted nod, the apparently-child seemingly enamored with the sounds the cuffs made when they clinked together.
“And you-” He turned towards Marvel, who shrank back before seemingly steeling themself. “-are in fact ten.” The… well they had thought demigod but apparently all three were some sort of realms-being, which had apparently made Constantine pale and start cursing before stomping out of the Watchtower. Another nod and shaky thumbs up.
Alright. Okay. They had in fact let a ten-year old join the league, which wouldn’t have been so bad if they had known. Especially the fact that apparently Marvel was only half-human, which suddenly explained so much about how he didn’t know so many things about a human life. Which-
“You,” he turned towards Phantom again to make sure he was listening before returning his attention to Marvel. “And you have both lived at least a year in the human realm with human companions, but your-” He turned his gaze towards the ravenette in the center. The six year old apparently. “-experience with the human realm is literally just with the Light.”
Yet another distracted nod. Okay. Bruce was tempted to scream in a room for the entire situation that had cropped up from the single action of taking Klarion’s familiar and then the boy himself into custody. Then again, it was honestly a much better thing they had apparently caught this.
“Alright,” he sighed, suddenly feeling incredibly exhausted. “To make sure I have all of this correct-” Because it was already a shitshow and the amount of shouting had absolutely spooked the child. To the point he’d- according to Marvel- made what was apparently some sort of very distressed noise that had made both him and Phantom running. Or rather flying and portaling.
“-in the realms, people there make friends through fighting,” Bruce pauses to make sure he got that part correct. The origin of this entire misunderstanding with the chaos-lord. Lordling?
All three nodded, Klarion losing interest in the cuffs and starting to pet his cat. Familiar. Everyone had referred to it as a familiar and Marvel had appeared utterly horrified that they had taken said familiar away. Somehow he was the one the trio were currently trusting and weren’t doing the same towards any of the other league members.
“And you have been trying to make friends with the Jr team, which they have been taking as an attack due to this miscommunication.” Honestly they should have gotten more information, though he couldn’t exactly blame any of the teens, what with everything they were currently dealing with.
“... is there any sort of guardian or something you might have, that can be contacted? Or anyone that could help prevent a situation like this from happening again?” All three avoided his eyes, suddenly finding things like the table and walls very interesting.
Oh. Hm. This could be a problem.
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