So the FTC banned Non-Competes, now what?
A few weeks ago, the world was buzzing over the FTC’s ban on Non-Compete agreements. While everyone’s first reaction was positive, for those who took that as the opportunity to finally make a career move, not so much. Here’s what I know as of this moment:
This bill was just passed, it is not law and if all goes well, that will happen in September.
That means that companies will no longer be able to use non-compete clauses in employment agreements, it does nothing for other restrictive covenants imposed in those contracts. Non-Solicitation and Non-Disclosure will be in full effect, and those are just as onerous as non-compete clauses, just in other ways.
This will be retroactive, yet it’s unknown how that will play out exactly. Analysts claim this will unlock over $300 Billion in new wages and job growth.
Could be?
The US Chamber of Commerce has already filed suit.
Large, very, very large businesses will follow suit and then we’ll know what kind of power the FTC actually has. Pending Decision in July by the Supreme Court (The Chevron Doctrine)Let’s not forget a potential change in Presidential Administration that only suspends rules not laws.
So, what does all of that mean?
Smart Money says it’s not happening anytime soon.
Pretty Good money says it’s not happening, period!
Longshot-maybe in 2025
Never say they don’t hold up
Don’t assume because someone else left and wasn’t pursued that you’re okay. You are not, or maybe you are, who knows at this point.
If you’ve never seen the fallout of someone being sued for breaking their non-compete, here’s one to ponder…
Outside Sales Rep, 35 years old, two years with the company generating $5M in sales and earning $250,000
Boss quits, territory shifted, new leadership, time to go
Sued for $8.5 Million
The timeline to complete was over 3 years
Pre-trail cost for defense $200,000
The employee won, but did they?
– Written by Prudence Thompson, June 2024