The Federal Trade Commission (FTC) has recently announced that it is considering a ban on non-compete clauses for employment contracts across the country. The rule, if accepted, would make it illegal for employers to require employees to sign non-compete agreements as part of their terms of employment. The rule is meant to help many employees who often struggle to find work as a result of these restrictive agreements.
What Are Non-Compete Clauses? In simple terms, non-compete clauses are pretty much what they sound like: they are a type of contract that prevents an employee from competing directly with their employer for a certain amount of time (generally between six months and two years). Usually, this means they are restricted from seeking employment from a direct competitor within the same market, as well as prevented from starting their own company that might directly compete with their employer’s business. To seek new employment, they would need to find work with an employer in a different industry, or go find work somewhere their current employer does not do business. Why is the FTC Considering Banning Them? Non-compete clauses have long been considered controversial because of how they limit employees’ ability to seek work within their own field of expertise. Because of these agreements, people are often stuck with the same employer, unable to find jobs in their field that might pay better or have better benefits. Even when they do, they are often forced to move far away, and become unable to make use of any professional contacts they made while working for their employer. What Effect Would Banning Them Have? The most immediate impact is that it would allow employees currently bound by non-compete clauses to find new work, escaping jobs they may currently feel trapped in. This would have the overall impact of raising wages for many types of workers, as they would be able to either find better paying jobs, or negotiate for better compensation to remain in their current jobs. It would also make it much harder for employers to prevent their workers from forming their own companies to compete with them, increasing the competitiveness of the marketplace overall. What Should You Do if You Are Under a Non-Compete Agreement? If you are currently bound by a non-compete agreement as part of your employment contract, you may want to speak to a lawyer with experience handling employment law issues. Non-compete clauses can be quite restrictive, but that does not mean you do not have options available to you if you want to find other work. The sooner you get in contact, the sooner they can get to work on your case. Steven Mitchell Sack, the Employee’s Lawyer, is a New York employment lawyer with more than 41 years’ experience handling the many aspects of employment law. His new book, “Fired!: Protect Your Rights & FIGHT BACK If You’re Terminated, Laid Off, Downsized, Restructured, Forced to Resign or Quit,” is available in hardback, and contains valuable advice on dealing with employment and labor law issues. To purchase the book, feel free to contact Steven Sack at 917-371-8000 or visit the website at legalstratpub.com. To inquire about a legal matter, please feel free to contact attorney Steven Sack at 917-371-8000 or stevensackatty@hotmail.com.