How Non-Compete Clauses Cost Americans $300 Billion A Year
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- Опубликовано: 20 май 2024
- In the flurry of papers that an employee receives during the onboarding process, there is one clause that could have a significant impact on their future career: the non-compete agreement. A non-compete agreements restrict workers from pursuing similar career opportunities or starting a new business in the same field as their previous employer. The wide use of non-compete agreements has led the Federal Trade Commission to propose a ban on the practice. If passed, the ban would prevent future non-competes from being issued and void all existing contracts. While some have resisted the FTC's proposal, the organization estimates that a complete crackdown on non-competes could expand career opportunities for 30 million Americans and increase wages by almost $300 billion annually.
Chapters:
00:00 - Introduction
01:21 - What is a non-compete?
03:24 - From the C-suite to Main Street
07:31 - The backlash against the FTC
10:35 - What’s next?
Produced by: Kate Hammer, Anuz Thapa
Edited by: Kate Sammer
Camera: Kate Summer, Anuz Thapa
Animation: Mallory Brandon, Josh Kalven
Supervising Producer: Jeff Morganteen
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How Non-Compete Clauses Cost Americans $300 Billion A Year
If a company can dictate the terms of employment after an employee has left the company, they should also be responsible for continuing compensation to that employee as long as the contract is in effect
This.
How so? Nobody is forcing people to sign these contracts?
@@Lomaherp They won't give you a job if you don't sign it. "Just find a different job" is not an option for people who have been searching for months and have only gotten that one offer.
@@Lomaherp Its implied that if you dont sign it when your hired, you will be immediately fired. Why do you think the employer gives it to you?
@Dank Wow. You've never been forced into signing a contract to take a job you needed? That must be nice. Congratulations. 🎊
No company should have that much say in a worker's life.
Then dont sign bro
@@OM-bs7of it sometimes impossible to get jobs without one in some fields
@@OM-bs7of easier said than done. There are times, such as the hairdresser's example, where someone's in a desperate situation and they sign practically under duress.
If one has options, then yeah, they shouldn't sign. However, companies shouldn't have so much power that they can include unfair practices in their contracts to screw people over. They wanna do that with high level folks who are at or near the top of the company's chain of command? Fine. Those folks have less competition for jobs compared to lower level folks. That shouldn't be a thing implemented to regular folks who aren't getting paid upper 6 figures or more.
The problem is that you have to give if you want to take. Right now, there is an imbalance in favor of the worker. Companies are extremely exposed to lawsuits, it's super easy for employees to sue their former employer for any BS reason, and hard for companies to win. Anything is wrongful termination now. So, while workers can quit whenever they want, and companies are left exposed, you don't have the same thing for workers.
Think about work contracts. If you sign a 5 year employment agreement, that is, you sign that you're going to work at that job for 5 years, the company isn't allowed to break that. The company actually can't fire you until the 5 years are up, but the employee can quit whenever he wants. There is no way for the company to enforce that. That's one-sided as hell.
Non-compete agreements make a lot of sense in a lot of cases. It takes time and money to train an employee. You spend that time and money training them, and then only a few years later, when you still haven't recouped that investment, they go and get a job at a competing firm that will pay them more. And OF COURSE they will pay them more, not only they're coming fresh out of a position with their competitor, fully trained, and so the new employer can put them to work immediately, but they're also bringing in a lot of trade secrets from their competitor, it's a valuable resource.
I don't necessarily like the concept of a non-compete agreement, but we need some balance. Ideally, the market should be freer, employers should be allowed to hire and fire anyone without reason at any time, and employees should also be free to leave whenever they want. There should then be enforceable contracts where you agree to stay at least a certain amount of time with a company, that both parties sign only if they agree with it, and for certain other things in exchange.
If you're going to remove non-compete agreements, then you have to remove the laws that forbid companies for charging you for training, and allow more flexibility for the employer to fire people.
@@dannnyyang It doesn't work, I speak from experience. I own a small firm, that requires quite specialized and skilled professionals. Sometimes, we've gone through the trouble of qualified engineers elsewhere, and paying to relocate them if necessary. That costs money. We offer a lot of incentives to keep the people in the company, including raising salaries almost constantly.
I paid for the cost of finding, relocating, and qualifying those workers. I *already* paid extra, a lot for them. Add their salaries to that, and divide the initial investment across the time they stay with the company, and that is my actual cost. They will ALWAYS be cheaper to a competitor, since they won't have to spend the money finding and training them, so they can ALWAYS offer more money. Sometimes, startups will offer preposterous amounts, that I could just NEVER match.
If there are no non-compete agreements, then you're encouraging companies not to find younger talent and train them, but rather go and hunt in the company across the street. Just lure workers away from your competitors. You don't have experience and training? Sorry, I won't hire you, because I know you will just leave for another company afterwards and I'll lose, so I'll just go and offer more money to the guy that works at a competitor. Good luck finding a job as a young guy fresh out of college.
Non-compete for someone working at a salon is WILD.
I guess they cut hair in the opposite direction from other salons or don't use Paul Mitchell products.
Jimmy John's used to also and all they make are sandwiches.
I actually found that one quite reasonable.
It was just for a 10 mile radius and just for one year.
I can see the point of the salon: if someone explicitely likes that hairdresser they might switch salon of the hairdresser starts working for the salon next door. The salon doesn't prevent the employee from ever finding a job again: 10 miles is probably less than the avarage american commute, and after a year the hairdresser can even work closer to home.
10 miles is just enough to prevent most customers from following the hairdresser to the new employer without putting big strain on the hairdresser.
When I hear of janitorial services being subjected to a non-compete that sounds way more crazy to me. A company hiring janitorial services from another business most probably won't switch firms if a janitor switches employment.
@@johntracy72 Jimmy John's chairman, Jimmy John Liautaud is a big game hunter. He even hunts elephants and has wounded them without retrieving the animal. There is a boycott of Jimmy John's in which I participate.
interesting
I agree (with the FTC) - non-compete clauses are out of control and need to be banned. The main argument I've heard for having a non-compete clause is for for protecting a company's intellectual property, but companies already have laws against IP theft, or sharing confidential IP with competitors. Non-compete clause exist solely to force an employee to remain at a company and. should be banned.
Depends, imagine Apple shows up and reach out to your top talents by offering them 2x pay, and they take all the knowledge with them to finish up all the pending projects differently and patent those before you could. lol.
@@Steven-xf8mz that's just regular market forces at work though. If another company is willing to pay 2x salary to get talent from another company, then that just means the prev company is not paying the fair market value for the workers and if another company will pay more for those talents, then the workers should be free to take their talents elsewhere. Trying to restrain the freedom of workers to choose their employers with non compete clauses is against the free market and against the concepts of liberty and freedom.
@@johnrvf8099 well, how does some company compete with big arms who are full of cash. previous company could be paying above market value and apple/google can still walk in with 2x or 10x if they wanted to.
@@Steven-xf8mz by offering better products at better prices. If they cannot offer that, then they have no business existing. That's the nature of free markets and of capitalism. If Apple or google walks in with an offer of 10x more salary, then that is the market value of that specific worker. It means that Apple or Google values the talent of that worker and what it would bring to their company. Premium talent comes in with premium prices.
@@johnrvf8099 free market? you're essentially saying monopoly is legal. by your standard then why isn't non-compete legal, it's also a part of market tool, thus free market on its own. it sounds like you have no idea what's going on and how free market works.... free market has its own restriction, if free market means anything allowed, then non-compete would hold ground easily as it's free to do so.
If FTC protecting employees from non-compete clauses is now "fundamentally changing the rules of employment" with a "sweeping change", then American businesses have become far too dependent on abusive employment terms. Disgusting, US Chamber of Commerce.
Abusive employment terms? How about abusing employees without healthcare or paid leave!
All Non-Compete Clauses should be illegal and non-enforceable. They are entirely anti-free market and it is authoritarian to enforce them to any degree.
if you dont like non-compete clauses, you're a communist
They are in most European countries
@@syncaccount8550 Do you know which countries still have them?
Non-compete is a service provided by employees to their employer. Employers have to pay for this non compete service. To stop employers from stifling competition and randomly binding ex-employees into non-compete clause, non-compete service should be at least 2-3 times employees pay by law. That will protect both employees and employer interest without stifling competition as much.
@@idle4407 No. It’s too authoritarian on individual persons. They must be unenforceable. This is ethics.
I once signed a non-compete as I knew its not enforceable.
5 years, worldwide in any form of games development - something I've been doing since 2000.
Judge in Colorado laughed and told the company to maintain my full salary for 5 years if they want to enforce it. They dropped it.
How did you know it was not enforcable?
@@isaksidenius7059 because they have to be very specific.
@@isaksidenius7059 At the end of the day the company has to take you to court to enforce the agreement. If the agreement is unreasonable then the court will favor the employee. In this case the judge basically said if he can't work anywhere outside of the company in the industry he developed his skill and knowledge for then the company would have to pay for the whole five years even after being laid off or fired. Not exactly what happened here but pretty much what might have happen.
An employer doesn't own the employee. Placing these restrictions on a low level worker is just gross.
Non compete clauses separate families while the CEO sits high and dry. Modern day slavery
Not quite. You're not looking at from the standpoint of the person who developed the clients, the intellectual property, forged the initial relationships, etc. You're welcome to start your own company if you want too and call your own shots, but let's face it - most likely, you don't have the talent or the drive.
@@nosirnthsethangs lmfaoooooo chiiiilllllll. 😂😂😂.
@@nosirnthsethangs Not quite. Your talking to the person who went to school, paid for their degree, became triple board certified, worked for multiple different companies and then encountered a non- compete. Was already self trained and received no training from company with the non compete. When the board committees set the standards for ALL of the businesses in our field there are no secrets. The standards are set outside of any single business.
@@nosirnthsethangs obvious bot/burner account
@@nosirnthsethangs that’s the problem non competes are being used against everyday people. They should be for C-suite and above. It has raised the cost of healthcare by 183 billion in the USA
Love how the US CoC VP says that the FTC can’t ban non-compete agreements because it doesn’t have authority. At no point does he even attempt to explain the benefits (if any) they provide and the consequences if they’re nullified. No, it’s simply a “we know they’re bad but you can’t stop us”.
Right. The US CoC is not even a government entity and has the interests of the corporations with them. Of course they want non competes
It seems to me that non-compete agreements are bad. But I don’t want unelected bureaucrats declaring they have sweeping authority they were never granted. It’s a valid concern.
@@CreepahKillahRSA I understand that. It's definitely a valid concern. But the point I'm bringing up is that if you have a problem with an unelected bureaucrat voiding NCAs, they need to defend it with more than "you don't have the authority". That argument will likely fall flat because if the FTC is empowered (by law) to make such decisions, then it doesn't matter how much you yell "don't do it". Rather, they should defend the merits of NCAs so that the FTC finds it harder to overturn them.
Yeah that guy and the guy with the speech disorder need to be reemed
It's their job. It is the FTC's job to regulate anti-competitive behaiviour. Imagine you walk into Wall Mart, and must sign as a condition of sale an agreement that you will not shop at any other department store, or you bought a Mac, and needed to sign an agreement prohibiting you from buying Microsoft Windows.
If a company doesn’t want someone working anywhere else for a period of time, then they need to provide proper compensation for that time. Otherwise people are effectively locked in indentured servitude. 99% of the time, it’s that simple.
Nobody is forcing people to sign non competes. Its the persons fault who signs it
@@Lomaherp Employers blackmail their employees with it, saying they’ll terminate employment unless they sign it. Labor laws exist for a reason, or else we’d have kids working 80 hour weeks.
@@Lomaherp hey smooth brains, did you not watch the video? they literally talked about the hairdresser having to sign a non-compete clause after she was already hired. they would have terminated/fired her if she didn't sign it.
@@samtherat6 But what about they gave them the employment in the first place? You're not complaining about that. Kids are too young to sign contracts.
@@XOPOIIIO what’s your point? kids are too young to sign contracts because a law says so.
If a company wants to control my life and career after the company lays me off for 1 or 2 years, sure do that, but then they need to keep paying me since they want to own me like their slave. Either that or let FTC ban this practice.
Showing up at the executives house with mr. Arkansas 15 and 35 extra doses of acupuncture is a great way to show these corporate communists who their real bosses are.
LOL like a slave. Yeah. I’m sure slaves AGREE to sign contracts prior to getting their well
Paid job. And no one is stopping you from working. Go get another job. Just not the exact same type of job
“I thought this was America” -Randy Marsh. Capitalism is for the market to determine which products and services people want. Noncompete clause basically remove your ability to play in the market as a service or product provider. Protect your business with patents and trademarks, noncompete clause should be removed as business should not own people. Or pull a reverse card and have businesses sign that they will not find another employee to fill the role you left if you have to sign a noncompete clause… I was never here lol.
Patents and trademarks are antithetical to capitalism
Non complete clause should only be allowed for roles that deal with trade secrets or very valuable IPs
Agreed. A working stiff who is really replaceable should not be under a non compete clause. They're not in a position to damage the company since they've no access to anything that can give any other company a leg up.
In my country I only see those clauses in C level jobs. I'm very surprised to see that US companies are using this so wide-spread around every level of the company
Thats already protected by IP rights and patents no need for a non compete clause. Eliminating thsi clauses might not have the impact they think for the workers though, it might actually lead to lower wages in the end.
The thing is, many of these same companies that have non-competes likely already have different legal agreements that cover Intellectual Property and its usage outside of the company.
Or just sign a NDA?
To give perspective on solutions: in some EU countries, Non Compete Clause are considered illegal or void if are not paid. The company you leave has to literally pay you not to work in its competitors.
Which eu country?
@@denniszenanywhere at least France. Cannot speak for others as I don't know the law in those, but won't be surprise to have something similar.
@@runnexplorer Thanks
@@runnexplorer In Belgium too. Either they pay out (I think here it's half of the term, so if you have a 1-year non compete, they have to pay your 6 months). But depending on circumstances you can also negotiate with your employer to nullify the non-compete clause (which I did the last time I switched employers) and I also think (but I'm not sure) that they don't count if you are fired by your employer, only if you leave yourself.
Business policy in the EU is not aspirational
I sold residential solar for 4 years when I was in college, the first company I left because they didn't pay as much as the company I left them for but the first company had a non-compete clause. The second company said no worries because they gave me the comission but had all my sales appear as a sale from the company owner rather than my name and nobody knew the wiser because the second company had me as "lead generation" with someone else closing the deal even though it was me. On paper though I didn't violate the clause.
I do solar now. We are 1099s. I don't believe they can enforce this against 1099s for some reason but not sure of that's true.
@ahtan2000 there's lots of shady companies in solar, the second one I went to is legit, just not corporate so the owner DGAF about NCAs. I made great deals for homeowners and actually saved them money. A lot of companies gouge out homeowners because the profit margins are so big. I encouraged people to shop around and they did and they still came back. It really helps when the company doesn't have significant overhead to worry about but still sell the same systems the corporate company does. That's the crazy part, I sold the same systems at the 2nd company made by the company I left haha and made more income and saved homeowners more money.
What is shady is companies not backing up their claims with documents, or using a management company that can go under any day. Stability is key in leased systems.
If a company asked me to sign a noncompete, I would ask them to sign a contract to pay me if fired, layed off or otherwise not able to work during the period of non compete.
Love it.
Hah, tempting, but sometimes you sign what you have to in order to have a job / put food on the table. That's why these types of agreements should just be banned, because sometimes you don't have much of a choice.
@@GameHackingGuru that's fine. Thankfully in my position, I have the upper hand. Having a specialized skill gives you a good position in that discussion
@GHG don't be afraid of saying no.
Usually CEO’s get a generous severance package when they leave or are pushed out in order not to work in the industry they are in at the moment, so it’s like they are being paid to respect the non-compete terms & conditions.
They really do need to do something.
The last time I changed jobs, I got hit with a non-compete, that covered my industry in the entire NYC area. I couldn't work for 6 months, fortunately it was only 6 months and I was able to survive it. But still I lost half a years income because my previous company refused to waive its non-compete clause. But what about the people who can't afford to not work for 6 months ??
You could have worked another kind of job for 6 months. It doesn't mean you just lose money. Time to try something new, really
@@timberwolfe1645 Sure you can 'try' getting a job in a different field, but you have 10 years experience in your chosen field and have 0 years experience in other fields. Its going to be a heck of a lot more difficult and probably take you more than 6 months to even land a good job in another field with 0 experience.
So it would be pointless to put in the effort to get a new job in a different field compared to waiting out the non-compete for the 6 months and start the new job you were already offered.
What job was it? Was there a risk you could take either trade secrets, or customers to your next employer?
@@jac540 It was an IT job. No trade secrets involved. My old company lost the contract, to the new company. The new company decided it would not be easy to fill the role I had so they made me an offer. It was an easy decision I live near the client, I didn't have to move or anything and just continued doing the same job at the same place for a different company.
@@jefflewis4 wow thats insane they lost the client you did work for and still forced you under their non compete thats messed up
My wife violated her non-compete clause from her previous employer. They tried see who she was going to be working with before leaving but she kept silent as her new employer was a big competitor.
In my industry, they can just go on a website and it immediately shows all details of your new employer (if in same industry).
I’m a nurse practitioner in Florida who practices aesthetic medicine and offices make us sign a non-compete limiting us to a 15mile radius for up to 2-3 years. We also can’t work for anyone else while we actively work for another practice. It’s absolutely crazy. Every medical aesthetic practice basically works the same. There really isn’t a trade secret in medical aesthetics.
Ban on non compete would be great
Looking forward to seeing this BANNED
In some cases, non-competes make sense to protect a competitor from stealing private information or skills by hiring away their employees BUT it is also used frequently as a bullying technique to keep poorly paid workers from seeking better jobs elsewhere. I am a well paid engineer and signed a non-compete and I understand that but my younger son is a medical scribe in a hospital emergency room, gets paid minimum wage, and also had to sign a non-compete - that is bullying. Fortunately Oregon passed a law in 2021 that (among other things) that for a non-compete to be valid, the employee must make >$100K and the employer must have something to protect. That seems reasonable.
Oregon, Washington, Illinois, Virginia, Colorado, and Maine all have minimum pay requirements for non-competes. 3 states nearly ban them completely in California, Oklahoma, and North Dakota.
@@Carahan I think completely banning non-competes is the wrong approach. There is a valid reason for them in some cases and in those cases, companies are going to find a way to protect themselves.
If you don't want your employees to go away then y treat them well and pay them better. You don't own workers. The skills they have are their even if you trained them. Non competes are just indentured servitude rebranded
@@atra7812 This is not always about how employees are treated but also about inside information they know like.sales and client information, new products, financials, trade secrets, etc. Protecting this information is a valid concern and non-competes is a reasonable way to protect that. I agree that in some cases (like what happened to my son) that non-competes are abusive (but calling it slavery is a bit overblown). The best approach is to find a way to protect employees AND employers.
@@connecticutaggie most of those things are already protected by IP laws, if they want silence on other things not explicitly protected by law the need to pay for all the missing income due missing opportunities.
People who say that they just shouldn't have signed forget about the 13'th ammendment. It doesn't just ban slavery, it says that there are circumstances where a contract just can't be justified even if the person knows what they are getting into. A company shouldn't be able to force you to do or not do anything when you aren't on the clock.
All at will employment should be prohibited from signing non-competes. If you can fire someone without cause at anytime you shouldnt be able to prevent them from leaving at anytime to work in the same field.
The FTC is tasked with ensuring competition. How have they missed something labeled as anti-competitive so long is an amazing failure of governances
You live under the dictatorship of capital. They couldn't care less, they have doble standars for everything.
Only in America can a Hair Salon require a non-compete agreement..
Lmao, you mean the country that supports genocide in Palestine and kidnapped and tortured Europeans after 9/11?
What I hated was when I was laid off and I had to ask my old employer who laid me off if my new job was ok.
And my fun was that my old employer didn’t understand what my new job was despite being completely different in every way. My old boss had to step in and explain fight for me to be able to work again.
It was awful.
It is inane that a company would have say over someone's life after they no longer work at that company.
This clause doesn't make any sense for the vast majority of workers. Specially the ones for jobs such as landscaping. Competing!? really!?!? this only makes sense when you make a company and start bribing a bunch of customers/employees from your previous company.
And even if so, in that specific case, it is anti capitalist as you're preventing competition
It was a very bad decision to remove the Glass-Steagall Act in the late 1990s, which led to the spectacular failure of huge banks during the financial crisis of 2007-2008. To prevent another disaster, Dodd-Frank and this statute both need to be reestablished right away. What happened with SVB is only the beginning of what will happen if nothing is done to address the current situation.
In my opinion, SVB was attempting to restructure their bond portfolio, which involved selling their low-yielding bonds despite the potential loss, and compensating for it by buying higher-interest-rate bonds on the open market.
@@richmorten Despite the economy's resilience thus far, the SVB scenario cautions that the effects of Federal Reserve rate hikes persist. During such periods, investors must remain alert to anticipate what comes next. It is not necessary to act on every prediction, so I recommend seeking the guidance of a financial advisor, which has been my go-to advice for some time now.
well said a i told my friends this yesterday at the office
@@KevinEvans-mq4ob Having a counselor is essential for portfolio diversification. My advisor is vivian marisa coelho, who is easily searchable and has extensive knowledge of the financial markets.
Do you scammers really think that still works?
This issue is rampant in dental field too, a dentist is barred from working within 30 miles for 5 years . . . Essentially forcing you to relocate to a different city
You guys are doing a great job of getting information out.
I once worked for a real estate agent as an "independent contractor" (translation: they didn't want to pay health benefits or 401k contributions but still considered me to be a full-time employee with all the responsibilities). A month later, when they asked me to sign a non-compete agreement, I told them to shove it.
In a more civilized world it takes the form of gardening leave. A period in which firms PAY departing staff their full wages whilst the employee can not take other employment or compete. The idea that anyone should agree to a one-sided contract where they can't seek other employment yet don't get paid is nuts.
That's just how those stormtroopers with hive mentality are. They will defend their capitalis masters even if it means a detriment to themselves.
I understand trade secrets....but if I sign a non-compete, you BET I'm demanding at least 20k a year extra.
If they ask why, I say that's the price of my unemployment for x years that I cannot work.
Then I work same company 40 years and get 20k extra a year 🙃 😅 🙂
Confidentiality agreements, yes. Non-compete and non-solicit? Just immoral.
One of the worst non-competes are with Robert half, Heard horror stories from other recruiters and business development reps that work there,
Its true. Even for the contracted consultants too. I have heard stories companies wanted to hire full time but drop the idea because Robert Half fee was too high.
Non-compete clauses are anti free market. They should be illegal.
its corporate blackmail and companies use it to retaliate against their employees
To put into perspective, imagine non-compete in the NFL, NBA, or MLB.
That would be un-American.
🇺🇲 🇺🇲 🇺🇲 🇺🇲 🇺🇲
These rules seem inherently unfair to workers, especially in "at will" states. Employers hold far, far too much power over workers' lives already. Anything that we can do to give workers more rights and a better bargaining position is, in my opinion, warranted.
The law should require that the former employer must pay the employee for the non-compete to be effective. If a non-compete is enforced without paying the former employee it is the equivalent of slavery which we banned during our Civil War.
I am always surprised of how far behind is employment law in the US
These non-compete agreements are illegal in 99.9% of the cases anyway. Employers know that but have employees sign them any and then threaten to sue if there is non compliance. When challenged legally, employers always back off and drop their lawsuits.
Yeah, in my experience they're a non-issue. Which begs the question... is this really journalism?
@@RichardAmesMusic yes
They might be illegal, but they still cost the same money to defend against as legal ones.
As someone who’s experienced a civil Supreme Court lawsuit I could tell you a dozen ways to drag out a lawsuit to make it as expensive as possible and they’ll still get nothing if they win.
Non compete and non disclosures should be banned in the legal system.
I had to sign a cooperation agreement and non disclosure agreement as a condition of post employment benefits. I've heard of non disclosures but that was the first I heard of cooperation agreements.
I remember when I was 16 and working for $7.25/h at a Bounce-U they had me sign a non compete in my contract. I've always thought this was wild, not that I was going to leave for another kids birthday party place.
I refused to sign one and laughed at them when they brought it up. You hired me for my skill and unless you want to pay for all the potential earnings for those skills, for exclusive rights, you will have only what you pay me for while your paying me for it. Still got hired. Remember they need workers with skills. Get skills and set standards.
They are in many contracts here in Norway, bur are nullified by law where it dictate that you can't agree to not continue to work, no matter what way it is. So you can happily sign it here, with no consequences.
Great insights!
Non-Compete Clauses should be illegal. It is crazy that a company has the power to tell you that you can't work for another company as whatever job you did at that company. How else would i make money than if I can use the skills I have learn and trained for to make money. That is the whole point of the economy is to use the skill you have to work in the field that is best suited for those skills to make a living. If i was a programmer for a few years at one company they expect me to go flip burgers. That is ridiculous. That is anti-free market capitalist.
Unless the company had a severance package that lasts the entirety of the NCA then who are they to tell someone what they can do with the degree they paid for? Craziness
Keep up the incredible reporting on youtube! Obviously non-competes are bad for employees, competition, and wages.
There are companies that lay thousands of people off (for quarterly boosts), then tell them they are bound by the non-competes and NDAs. WTF?!
In Florida, non-compete contracts are out of control. Some companies even gave you an offer and send you the contract with small lines at the end were its mention that contract it's contingent to a non-compete and non-intention agreement signature.
I was through this with one Sprinkler Company and when I ask for a copy of both contingencies I declined the offers, it was a trapped. Them I understood why all previous designers moved to work to others states. They couldn't work in a 50 miles around for 2 years.
So if companies doing this it means their company is not good since they cannot compete. Anything to keep wages down while the CEO lives like a king!
*Companies : "We can fire you for any reason and hire your next door neighbor. But you CAN'T work with one of our competitors unless we allow it."*
I agree that FTC should ban Non-Compete Clauses / Agreements nation-wide. As mentioned in the video if a former employer (a) has solid reason to believe that another employer (b) has benefited from employer (a)'s intellectual knowledge, then employer (a) has other avenues to raise a lawsuit against employer (b). Non-competes only serve to entrap and enslave employees. e.g. Years ago, I had a workmate who tried to change jobs, his existing company told him that they would use his non-compete agreement to stop him from leaving the company. My workmate regressed into depression, became hooked on the drugs he was given to deal with the anxiety and depression, and he ended up in narcotics rehab. Non-Competes are absolutely evil, and FTC needs to abolish them once and for all!
In the meantime:
The broader a non compete the less enforceable it is, your former employer can’t unreasonably limit your ability to earn a living and you can’t use proprietary information for your own benefit, the big thing not to do is bring customers with you, both examples (hairdresser, fin planner) probably did that, you will always lose if you take customers.
If you’re going to a competitor, you should document you’ve provided your non compete to your new employer and that they accept the liability of your defense.
But they're gonna try! And it's gonna cost you to fight it!
We are already in the big crash , inflation is a catastrophe. This CPI report is a colossal failure. To bring the housing market to a halt,the FED will have to pull all the stops . The unfortunate issues is that the other market are being decimated. If you want to stay green ,you have to rely on a lot of diversification.
Currently up 15% and being carful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.
Pay your employees and treat them right. Non Competes would not be needed.
That’s funny. I was just talking to a friend about this. His non compete is indefinite. The company he works for also is not providing him steady employment as he is an independent contractor that relies on them finding him jobs. I think it’s sickening that they can make him stay indefinitely without work in his field and enforce this clause.
They might not be able in enforce and indefinite non compete, depends on the state he lives in. Courts generally do not like indefinite non competes. He should talk to an employment attorney in his state.
@@jamesodell3064 for sure. I don’t think so either. But for as long as he is working for them, he can’t go and get another job regardless. Even though it’s not fully enforceable, they could still go after him for a certain amount of time. It makes it quite the complicated situation. We also live in Texas and I believe that he would be on the losing end in court regardless.
What is the music at the end of the video?
Update April 23, 2024: Non-Compete Clauses are now HISTORY thanks to the FTC! Thank you Lina Khan!!!
I agree with the FTC. If I work in a warehouse for 10 years and leave, my resumé will say that I've worked in a warehouse for 10 years. Now I can't get a job in an industry that I have 10 years of experience in. Total B.S.
I understand high-level executives having non-competes because of their knowledge of company operations, but lower level employees don't make enough money to hold out for a year.
It's single-handedly the reason I've turned down several FANG offers. Such is life. Meh
I signed a non compete and it sucks. I didn’t understand what I was signing. I didn’t understand how serious it is.
A company that dose this to it’s workers is grimy and nasty and down right wrong I hope someone succeeds in the band of this ridiculous and unconstitutional way to take hold of a person trying to find another job if the current job wasn’t working out
No one puts a gun to your head and forces you to sign a legally-binding contract. Stop signing contracts whose terms you dont agree with.
True however not signing it would void your employment… so yeah
@@allenmobley8444 Are your job skills so weak that you can't say no and get a job somewhere else?
Colorado made the law regarding the non-compete clause pretty much banned for using. I'm really happy to hear that because I signed the clause. It's a small field and there's not a lot of places you can go. In the clause, it said I can't find a job with competitors and start my own business within 1 yr or within 25 mi. We are in the middle of denver so it's pretty much all of denver.
Companies that have non-compete clauses are red flags to what the company culture is like and what they think of their employees.
Imagine if it was more than 1-2 years of a NCC
If you have access to proprietary information or processes then it absolutely makes sense. In addition, if you have relationships with a companies clientele then it’s the same thing. You should be limited for a few years.
The same is not true for hourly or entry level roles.
I understand and agree that they should be used to prevent from stealing company secrets or clientele to begin an identical company, but def not right for regular workers
How can we know if we signed a non compete?
Can we refuse to sign and still get the job?
Non competes make sense to me and I fully support them. It is unfair for a business to build a product or service, go through extensive research and development on what works and what doesn't just so a former employee can pick out what works and go start a business or work for a competitor who could gain from that experience.
You're assuming that every company is doing something innovative when they're not. Even if they are, lower level employees who know nothing are forced to sign these agreements. Would it make sense to tell an Uber driver he can't work for Lyft until his two years is up?
@@flyer3455 that makes sense when you bring up low level jobs like Uber. But for high level jobs, non competes are justifiable.
Any Update Video given ruling?
I'm being coerced to affirm Opinion based CRT and non male/female.facts at my work. Who can I sue for coercion and internal abuse?
The FTC should regress the legality of non-compete clauses back to their original intention - to protect trade secrets at the executive level.
Nothing else.
I think the FTC should do it. Otherwise, we can pass some more laws in congress… or CA could ban any company doing business in CA from having non-competes in the US or internationally.
I mean im pretty sure my union has something like this but try and get a job that has the same safety, pay and benefits . It just cant be done and im totally fine with it. Being in the union is the best decision ive ever made.
Yeah but this doesn't affect you, since it sounds like you wouldn't leave based on what you said.
Mine when i was hired just says non-compete while working at the company, but free to do whatever after i leave
Nice to see Jonathan making an appearance.
In short; you're a slave to the corporation while working there, and after leaving
A person my son worked with left the company and almost a year later has not updated his LinkedIn page nor contacted anyone he had worked with.
This is extremely shady and stupid at the same time. Companies no longer train and they impose this on people common this is one thing I agree on the government actually quashing completely.
Employees are providing a service to their ex-employers by not going to their competitor or starting a competing business. The contracts themselves should be illegal if the workers are not compensated for the service they provide after they have left the job. Sometimes there maybe a legitimate reason for non compete clause. But to discourage employers from stifling competition and randomly binding folks into non-compete clause, the non compete service should be a very expensive by law, at least 2 or 3 times employees pay. This will protect both employees and employer interests without stifling competition as much.
The only time I have been involved with non-competes is when I sold or bought businesses and was fairly compensated.
Non compete clauses are part of a free market. Don't sign one if you don't like it.
non-competes are great for C-suite labor contracts (with or without "parachute" clauses.) If the employee does not have executive decision making, then a non-compete is junk. If you spot a non-compete and you are not c-suite, then ask for a one-way compensation separation agreement comparable to the term. (in other words if the employer fires or lets you go the non-compete is void. if you quit the job then the non-compete stands. post-employment compensation agreement could be the same relative to job duty risks. employers need prices to clauses to make it worth while up the chain of command.)
Which other US federal government agencies / commissions / administrations could have authority to ban non-compete clauses, in case the FTC is stricken down from doing so? The Department of Labor itself? The Department of Commerce? An act of Congress?
I'm suffering from this non-compete nonsense, I pray they get rid of it.
Question... what exactly do corporations do against the departing employee who fails to sign the non-compete contract? Fire them?
Actually you typically sign one on employment/onboarding or you sign it a few months after you start employment. And typically if you don’t sign it, the company will fire you immediately or basically put you in a situation where they could find “reason” to fire you in short order.
Seeing more of these in the UK. It’s wrong and unless the company pays you for the year to not work it shouldn’t be allowed.
It was added to my contract and I haven’t signed it on principle. Not everyone has that option
No wonder wages have gone nowhere since the 1980's....
not how but ask why waste printing all that onboarding documents, employee hand book, and pages of contracts when you can or will fire your employee in a second?
I wonder if these are the same employers that scream and yell free market.
The IP and Invention re-assignment agreements are terrible as well!Companies are going as far as owning your own personal works off the clock (that aren’t related to your work) and even when you leave the employer asks you to submit inventions a time period after you leave. #NotWorthTheSalary
THERE SHOULD BE NO NON-COMPETEs
only non-solicits