FTC just banned non-compete agreements
- Thread starter cptlo
- Start date
cptlo
Pursuit Driver
I'm not a fan of non-compete contracts and I don't think I'd ever sign one. However, this new rule prompts a few questions:
1. Should the FTC, a bunch of unelected bureaucrats, have the power to void millions of existing non-compete contracts like this and ban them going forward?
2. At a higher level, should the federal govt have the power to void and ban these contracts? Nobody is forced to sign them.
1. Should the FTC, a bunch of unelected bureaucrats, have the power to void millions of existing non-compete contracts like this and ban them going forward?
2. At a higher level, should the federal govt have the power to void and ban these contracts? Nobody is forced to sign them.
Paxilpapa
Serenity, through modern chemistry
Correct, a contract is a binding agreement between two entities, each of which has an option to (or not to) participate. If the government has the power to void that contract,,, they can void any contract.
Again, I'm not a lawyer, but I don't think this is a matter of the FTC having the power to void contracts so much as them enforcing the civil rights of individuals to have the right to work.
Several states have "Right to Work" laws that make non-compete contracts unenforceable. It appears to me that is just what happened on a federal level. Since rights and liberties come from the U.S. Constitution, perhaps this is within the federal government's role.
cptlo
Pursuit Driver
Not sure that's accurate. Here is information for Georgia stating non-competes are enforceable.
Non-Compete Agreements In Georgia—FAQs
FREE CASE EVALUATION (844-LAW-4-WORK) - Are non-competes enforceable in Georgia? What if you are fired? How often do employers actually enforce non-competes? Learn the answers to these and other FAQs about Georgia non-compete law.
I'm also not sure non-competes rise to the level of denying individuals the right to work. Sure, they may limit what type of company you can work for but they don't prevent you from working somewhere else.
And, again, nobody is forced to sign these contracts. From a freedom standpoint, if two entities (employer and employee) agree to sign a contract that doesn't involve any illegal activity, why should the govt have the right to cancel that contract?
Georgia's law regarding this is not terribly strong, some states have much stronger legislation.Not sure that's accurate. Here is information for Georgia stating non-competes are enforceable.
Non-Compete Agreements In Georgia—FAQs
FREE CASE EVALUATION (844-LAW-4-WORK) - Are non-competes enforceable in Georgia? What if you are fired? How often do employers actually enforce non-competes? Learn the answers to these and other FAQs about Georgia non-compete law.www.fidlonlegal.com
I'm also not sure non-competes rise to the level of denying individuals the right to work. Sure, they may limit what type of company you can work for but they don't prevent you from working somewhere else.
And, again, nobody is forced to sign these contracts. From a freedom standpoint, if two entities (employer and employee) agree to sign a contract that doesn't involve any illegal activity, why should the govt have the right to cancel that contract?
I think non-competes do deny an individual their right to work. True, no one forced them to sign the contract, but if you wanted the job, you had to.
I and my partners had to sign one when I sold my business. Didn't bother me much, as I have no intention of getting back into the field anymore than I am, but it did worry my partners quite a bit. I wasn't crazy about signing it, but any company I sold to would have required it, so if I wanted to cash out and retire, I had no choice.
An example...I still have my state professional licenses (three licenses in two states). I doubt I would, but if I wanted to I could make some really good and easy money by qualifying an HVAC company who isn't licensed (lots of them out there). It's legal as long as I'm a regular employee of the company in a position of substantial authority. Meaning...they just have to put me on the payroll. That would get sticky under the current non-compete agreement, but not if they are struck down.
cptlo
Pursuit Driver
Signing such a contract is still a choice. Nobody is being forced. If they wanted the job but didn't want to sign the non-compete, fine, they could go work somewhere else that doesn't have a non-compete.
In your situation, you still had a choice. You could have chosen to not sign. Sure, that choice may have had ramifications, but you still had the freedom to make that choice.
Again, I'm not a fan of non-competes but I am a fan of freedom and limited govt. I just don't think the govt, especially a bunch of unelected bureaucrats, should have the power to void millions of legally signed contracts by passing a new rule.
I'm a fan of freedom too, but I'm erring on the side of the worker and individual. Again, I have no plans to get back into that side of the business, but if I wanted to, should I be prevented from using my three professional licenses I worked hard for, and the decades of knowledge and experience I still have?
Many judges are un-elected as well, but they still have the authority to rule on cases. Supreme Court Justices are not elected, but they interpret the Constitution. Unelected people make rules all the time. Yeah, sometime they shouldn't, but there is precedent for it.
Boss 302
Pursuit Driver
Non-compete contracts can get too extreme. For example, the last medical clinic my wife worked at was bought out by North Georgia Physicians Group. They wanted to keep my wife on as a nurse practitioner, but they wanted her to sign a contract with a noncompete clause. The noncompete clause would have prevented my wife from working with patients within a 15-mile radius of any NGPG practice. Essentially, that would have prevented my wife from working as an NP anywhere within a reasonable commute from our home.
My wife had a BSN and MSN and went to medical school for a year to be a nurse practitioner. Outside of high school, this was the only profession my wife ever worked in. There's no difference in how NGPG provides patient care compared to any other practice. They were trying to prevent practitioners and nurses from accepting offers from other medical practices in the area. She refused to sign the contract with the clause, and they withdrew the offer.
My wife had a BSN and MSN and went to medical school for a year to be a nurse practitioner. Outside of high school, this was the only profession my wife ever worked in. There's no difference in how NGPG provides patient care compared to any other practice. They were trying to prevent practitioners and nurses from accepting offers from other medical practices in the area. She refused to sign the contract with the clause, and they withdrew the offer.
cptlo
Pursuit Driver
If you signed a contract stating you wouldn't for X amount of time, then yes, you should be prevented from doing so. Or you could still do it under threat of possible litigation.
Where do we limit govt's power? Should the govt be able to void other types of legally signed contracts?
Judges and justices rule on cases based on the Constitution and written law. That's a big difference from an administrative agency making a rule.
cptlo
Pursuit Driver
Some may be extreme, but no potential employee is required to sign one. It is always a choice. If a potential employee doesn't like the terms of employment which could be signing a non-compete, salary, vacation, etc., the potential employee can simply say no and look for a job elsewhere.
When it gets outside of the Constitution, but this might not/
You keep going back to signing one being a choice, and you are right...sort of. But if an entire industry starts doing it, is it still a choice? I don't know what is typical in IT, but if several companies do non-competes, most of them will follow suit. How would you feel if you quit your job and couldn't work in the field you went to college for?
Any company I sold to would have required a non-compete, so my other choice was to stay in it and keep working, and miss out on the nice payday. Not much of a choice.
cptlo
Pursuit Driver
I wouldn't put myself in that situation in the first place if I wanted to continue working in the IT field.
And, yet, still a choice.
Call me crazy but I just don't like more govt rules that go against freedom. It's that simple.
What if all employers of IT personnel started requiring non-competes? It's pretty universal in certain fields, such as the medical industry and other "professional" fields.
Would you stay where you're at no matter what? Change fields? Become a cat gigolo?
You're looking at freedom for employers, I'm looking at freedom for the individual. Non-competes protect the employers, not the individual.
cptlo
Pursuit Driver
Well, yeah...duh.
I'm actually looking at it more from a freedom/contract standpoint. If two entities sign a legal contract, that should be between those two entities and the govt shouldn't get involved. What if the FTC decided that all right-leaning websites were a threat to national security and made a new rule that no right-leaning website should be allowed to have internet access? Would that be OK? Slippery slope...
The government should stay out of it unless such contract breaks other laws or restricts civil liberties. In this case, I think it does the latter. Though these contracts are technically a choice, there are times when there is little practical choice. In the case of Boss's wife, refusing to sign it cost her the job.
Boss 302
Pursuit Driver
I get what you're saying. Let's say she signed the contract, and two years later, the group closed the practice, and they had no NP positions to transfer her to. She would be out of a job, and because of the noncompete clause, she would not be able to work for another group. Or let's say they had a position but it was a 90-minute commute to get to work, so she turned it down. Should she be expected to have to find a new career when she has 30 years of work and 7 years of education invested in this one? This is the extreme I'm referring to in these noncompete contracts.
cptlo
Pursuit Driver
Just because there is a non-compete, that doesn't mean it has to be enforced. In the situation you describe (group closes the practice with no other positions), the chances they would sue her are very slim. They still could, but why would they? It would cost them $$ to do so.
Here's a similar contract situation....let's say you are 18 and going to college. You take out $100K in student loans. In doing so, you signed a contract stating that you would pay back those loans. You were not forced to take those loans. You weren't even forced to go to a college that resulted in needed loans or even any college at all. Signing for those loans was a choice. Now Biden is cancelling many student loans despite the contract stating the student would pay them back. Should the govt be able to modify/void this contract also?