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The New Coffee Room

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  3. Non-Compete

Non-Compete

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  • G Offline
    G Offline
    George K
    wrote on 20 Apr 2024, 14:30 last edited by
    #1

    https://natlawreview.com/article/federal-trade-commission-vote-proposed-non-compete-ban-april-23

    On April 16, the Federal Trade Commission (FTC) announced that it will hold a special Open Commission Meeting on Tuesday, April 23 at 2:00 p.m. ET, for purposes of voting on its proposed final rule banning non-compete agreements.

    At that meeting, it is expected that the FTC will disclose the proposed final rule, Chair Lina Khan will offer brief remarks followed by a presentation by FTC staff, and then the Commission will vote whether to issue the final rule.

    As we have previously covered in detail (here, here, and here) the FTC issued its Notice of Proposed Rulemaking in January 2023. The proposed rule in the form previously disclosed by the FTC for public comment would ban employers from requiring workers to sign non-competes and require recission of existing non-competes. The proposed rule would apply broadly, not just to all employees, but also to independent contractors and to any individual who works for an employer, whether paid or unpaid (e.g., externs, interns, volunteers, apprentices, or sole proprietors). It also would apply not just to non-competes that expressly prohibit a worker from seeking or accepting certain employment after the conclusion of the worker’s employment with the employer, but also to any contractual provision that functions as a de facto non-compete.

    This is, potentially, a BFD for docs.

    "Now look here, you Baltic gas passer... " - Mik, 6/14/08

    The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.

    C 1 Reply Last reply 20 Apr 2024, 16:06
    • M Offline
      M Offline
      Mik
      wrote on 20 Apr 2024, 14:59 last edited by
      #2

      Great idea, and good for my daughter. I wonder how they feel about NDAs. In her industry they are very tight lipped about what they are doing for who. She can't even tell us.

      "The intelligent man who is proud of his intelligence is like the condemned man who is proud of his large cell." Simone Weil

      1 Reply Last reply
      • G George K
        20 Apr 2024, 14:30

        https://natlawreview.com/article/federal-trade-commission-vote-proposed-non-compete-ban-april-23

        On April 16, the Federal Trade Commission (FTC) announced that it will hold a special Open Commission Meeting on Tuesday, April 23 at 2:00 p.m. ET, for purposes of voting on its proposed final rule banning non-compete agreements.

        At that meeting, it is expected that the FTC will disclose the proposed final rule, Chair Lina Khan will offer brief remarks followed by a presentation by FTC staff, and then the Commission will vote whether to issue the final rule.

        As we have previously covered in detail (here, here, and here) the FTC issued its Notice of Proposed Rulemaking in January 2023. The proposed rule in the form previously disclosed by the FTC for public comment would ban employers from requiring workers to sign non-competes and require recission of existing non-competes. The proposed rule would apply broadly, not just to all employees, but also to independent contractors and to any individual who works for an employer, whether paid or unpaid (e.g., externs, interns, volunteers, apprentices, or sole proprietors). It also would apply not just to non-competes that expressly prohibit a worker from seeking or accepting certain employment after the conclusion of the worker’s employment with the employer, but also to any contractual provision that functions as a de facto non-compete.

        This is, potentially, a BFD for docs.

        C Offline
        C Offline
        Copper
        wrote on 20 Apr 2024, 16:06 last edited by
        #3

        @George-K said in Non-Compete:

        ban employers from requiring workers to sign non-competes and require recission of existing non-competes.

        Doesn't that take a bargaining chip away from the employees?

        M 1 Reply Last reply 20 Apr 2024, 17:46
        • 8 Offline
          8 Offline
          89th
          wrote on 20 Apr 2024, 16:21 last edited by 89th
          #4

          Interesting. A year ago I signed a non compete because there was drama with companies fighting over the same people. This would nullify my non compete, which I’m fine with. You can get paid more if the company knows you could switch easily to a competitor in the same space.

          1 Reply Last reply
          • G Offline
            G Offline
            George K
            wrote on 20 Apr 2024, 16:52 last edited by
            #5

            Not unusual for medical practices to have a non-compete in their employment contract. Frequently, the radius was 10-15 miles.

            "Now look here, you Baltic gas passer... " - Mik, 6/14/08

            The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.

            1 Reply Last reply
            • R Offline
              R Offline
              Renauda
              wrote on 20 Apr 2024, 17:24 last edited by Renauda
              #6

              Years ago, a friend of mine was one among many laid off from some outfit after head office in the US decided close its office here. They were given two weeks in advance and non compete forms to sign or risk being fired on the spot. There was no compensation package offered as an incentive to sign. Everyone walked off the job on the spot. No one was left to fire.

              Elbows up!

              1 Reply Last reply
              • L Offline
                L Offline
                LuFins Dad
                wrote on 20 Apr 2024, 17:46 last edited by
                #7

                Non-competes are generally worthless if a former employee chooses to challenge them anyway. The only time that I’ve heard of them actually standing up to a court challenge was in the case of an employee taking his client list directly to a competitor.

                The Brad

                R 1 Reply Last reply 20 Apr 2024, 18:11
                • C Copper
                  20 Apr 2024, 16:06

                  @George-K said in Non-Compete:

                  ban employers from requiring workers to sign non-competes and require recission of existing non-competes.

                  Doesn't that take a bargaining chip away from the employees?

                  M Offline
                  M Offline
                  Mik
                  wrote on 20 Apr 2024, 17:46 last edited by
                  #8

                  @Copper said in Non-Compete:

                  @George-K said in Non-Compete:

                  ban employers from requiring workers to sign non-competes and require recission of existing non-competes.

                  Doesn't that take a bargaining chip away from the employees?

                  Quite the opposite.

                  "The intelligent man who is proud of his intelligence is like the condemned man who is proud of his large cell." Simone Weil

                  1 Reply Last reply
                  • L LuFins Dad
                    20 Apr 2024, 17:46

                    Non-competes are generally worthless if a former employee chooses to challenge them anyway. The only time that I’ve heard of them actually standing up to a court challenge was in the case of an employee taking his client list directly to a competitor.

                    R Offline
                    R Offline
                    Renauda
                    wrote on 20 Apr 2024, 18:11 last edited by Renauda
                    #9

                    @LuFins-Dad

                    Here they only work or have teeth if the non compete is accompanied by a substantial financial payout to the employee.

                    Elbows up!

                    1 Reply Last reply
                    • M Offline
                      M Offline
                      Mik
                      wrote on 20 Apr 2024, 18:29 last edited by
                      #10

                      Has to be some form f compensation here as well.

                      "The intelligent man who is proud of his intelligence is like the condemned man who is proud of his large cell." Simone Weil

                      1 Reply Last reply
                      • taiwan_girlT Offline
                        taiwan_girlT Offline
                        taiwan_girl
                        wrote on 21 Apr 2024, 02:00 last edited by
                        #11

                        There must be some way to take into account not transferring company "secrets" and strategies. NDA's or non-competes do serve a purpose.

                        1 Reply Last reply
                        • M Offline
                          M Offline
                          Mik
                          wrote on 21 Apr 2024, 02:02 last edited by
                          #12

                          Trade secrets can be protected, but non-competes are very hard to craft such that they will stand up. They have to be very narrow.

                          "The intelligent man who is proud of his intelligence is like the condemned man who is proud of his large cell." Simone Weil

                          taiwan_girlT 1 Reply Last reply 21 Apr 2024, 02:19
                          • M Mik
                            21 Apr 2024, 02:02

                            Trade secrets can be protected, but non-competes are very hard to craft such that they will stand up. They have to be very narrow.

                            taiwan_girlT Offline
                            taiwan_girlT Offline
                            taiwan_girl
                            wrote on 21 Apr 2024, 02:19 last edited by
                            #13

                            @Mik Maybe trade secrets is not the right term, but I think that a person can gain a lot of company knowledge that would be very valuable to another company, even if it is not direct "quantitative" information, but more "qualitative" information.

                            G 1 Reply Last reply 21 Apr 2024, 11:56
                            • M Offline
                              M Offline
                              Mik
                              wrote on 21 Apr 2024, 03:06 last edited by
                              #14

                              Yes, that will happen in the course of employment. But it should not keep you from seeking employment in your field. A non-compete is what finally led me to go out on my own in consulting. They demanded I sign one and I declined.

                              "The intelligent man who is proud of his intelligence is like the condemned man who is proud of his large cell." Simone Weil

                              1 Reply Last reply
                              • taiwan_girlT taiwan_girl
                                21 Apr 2024, 02:19

                                @Mik Maybe trade secrets is not the right term, but I think that a person can gain a lot of company knowledge that would be very valuable to another company, even if it is not direct "quantitative" information, but more "qualitative" information.

                                G Offline
                                G Offline
                                George K
                                wrote on 21 Apr 2024, 11:56 last edited by
                                #15

                                @taiwan_girl said in Non-Compete:

                                Maybe trade secrets is not the right term, but I think that a person can gain a lot of company knowledge that would be very valuable to another company

                                The situation in the medical field is quite different. The only "asset" you could probably take with you is your patient base. If you're someone without an office (radiology, pathology, anesthesiology) I don't understand why a non-compete would be justifiable, and yet, they exist.

                                "Now look here, you Baltic gas passer... " - Mik, 6/14/08

                                The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.

                                taiwan_girlT 1 Reply Last reply 22 Apr 2024, 00:59
                                • G George K
                                  21 Apr 2024, 11:56

                                  @taiwan_girl said in Non-Compete:

                                  Maybe trade secrets is not the right term, but I think that a person can gain a lot of company knowledge that would be very valuable to another company

                                  The situation in the medical field is quite different. The only "asset" you could probably take with you is your patient base. If you're someone without an office (radiology, pathology, anesthesiology) I don't understand why a non-compete would be justifiable, and yet, they exist.

                                  taiwan_girlT Offline
                                  taiwan_girlT Offline
                                  taiwan_girl
                                  wrote on 22 Apr 2024, 00:59 last edited by
                                  #16

                                  @George-K In your case, who would you be signing one with?

                                  G 1 Reply Last reply 22 Apr 2024, 01:06
                                  • taiwan_girlT taiwan_girl
                                    22 Apr 2024, 00:59

                                    @George-K In your case, who would you be signing one with?

                                    G Offline
                                    G Offline
                                    George K
                                    wrote on 22 Apr 2024, 01:06 last edited by
                                    #17

                                    @taiwan_girl said in Non-Compete:

                                    @George-K In your case, who would you be signing one with?

                                    If your employer (group) had a non-compete, you'd have to find a job which is anywhere from 10-20 miles farther than your original place. Probably at least a 45 minute drive more.

                                    "Now look here, you Baltic gas passer... " - Mik, 6/14/08

                                    The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.

                                    1 Reply Last reply
                                    • G Offline
                                      G Offline
                                      George K
                                      wrote on 23 Apr 2024, 21:56 last edited by
                                      #18

                                      https://www.npr.org/2024/04/23/1246655366/ftc-bans-noncompete-agreements-lina-khan

                                      "Now look here, you Baltic gas passer... " - Mik, 6/14/08

                                      The saying, "Lite is just one damn thing after another," is a gross understatement. The damn things overlap.

                                      1 Reply Last reply
                                      • taiwan_girlT Offline
                                        taiwan_girlT Offline
                                        taiwan_girl
                                        wrote on 4 Jul 2024, 02:45 last edited by
                                        #19

                                        https://www.reuters.com/legal/us-judge-blocks-biden-administration-ban-worker-noncompete-agreements-2024-07-03/

                                        A federal judge in Texas on Wednesday partially blocked a U.S. Federal Trade Commission rule from taking effect that would ban agreements commonly signed by workers not to join their employers' rivals or launch competing businesses.
                                        U.S. District Judge Ada Brown in Dallas said in a written decision the FTC, which enforces federal antitrust laws, lacked the power to adopt broad rules prohibiting practices that it deems unfair methods of competition.

                                        1 Reply Last reply
                                        • taiwan_girlT Offline
                                          taiwan_girlT Offline
                                          taiwan_girl
                                          wrote on 16 Aug 2024, 01:22 last edited by
                                          #20

                                          https://www.reuters.com/markets/us/second-us-judge-blocks-ftc-ban-worker-noncompete-agreements-2024-08-15/

                                          A federal judge in Florida has temporarily blocked a U.S. Federal Trade Commission rule that would ban agreements commonly signed by workers not to join their employers' rivals or launch competing businesses, becoming the second judge to rule that the ban is likely invalid.

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