Employment
Employment
Posted on Apr 21, 2023
Big businesses rally to preserve their right to limit ex-workers’ job options
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"Corporate America is mobilizing to quash a sweeping FTC proposal that would prevent employers from limiting where their former staffers can work, citing the need to protect trade secrets."
Big businesses rally to preserve their right to limit ex-workers’ job options
Posted from nbcnews.com
Employment
Jobs
Business
Posted 1 y ago
Responses: 3
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LTC Eugene Chu
..."“This rule will negatively impact small businesses and economic growth and is not the result of legislation but rather bureaucracy,” wrote Mimi Steger, owner of North Port, Florida-based Total Martial Arts & Fitness.
Another commenter, Bruce Fearon, wrote in support of region-based noncompetes, noting that his medical practice focuses on lymphatic maladies and requires him to invest heavily in training new hires. “There is absolutely no incentive for me to teach anyone anything I know and practice, only to have them move into the neighborhood and compete against me,” Fearon argued.
Neither Steger nor Fearson responded to requests for interviews.
For now, businesses still have ways to coerce employees — especially lower- and middle-income ones — to stay, beyond nondisclosure and nonsolicitation agreements. “Training repayment” rules, for example, require workers to compensate their employers for development programs they undertake if they leave within a given time frame.
Last week the FTC proposed banning those, too."
..."“This rule will negatively impact small businesses and economic growth and is not the result of legislation but rather bureaucracy,” wrote Mimi Steger, owner of North Port, Florida-based Total Martial Arts & Fitness.
Another commenter, Bruce Fearon, wrote in support of region-based noncompetes, noting that his medical practice focuses on lymphatic maladies and requires him to invest heavily in training new hires. “There is absolutely no incentive for me to teach anyone anything I know and practice, only to have them move into the neighborhood and compete against me,” Fearon argued.
Neither Steger nor Fearson responded to requests for interviews.
For now, businesses still have ways to coerce employees — especially lower- and middle-income ones — to stay, beyond nondisclosure and nonsolicitation agreements. “Training repayment” rules, for example, require workers to compensate their employers for development programs they undertake if they leave within a given time frame.
Last week the FTC proposed banning those, too."
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Agree with SFC Casey O'Mally - most non-competes are ridiculous and should have no applicability because someone 'might' learn something.
However, there does need to be a trade-off. If the government is going to eliminate employers from having non-compete clauses, then the laws on IP theft and Trade Secrets needs to be beefed up so that it is easier to prosecute the individual (and the company they transferred it to) if someone DOES transfer information illegally.
I am curious how the FTC arrived at "banning noncompetes could boost worker's earning by nearly $300 billion annually". Everything I was able to find was just the FTC stating it on a 'factsheet'* which all the media is quoting - but nothing about how they came to that figure.
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* https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete_nprm_fact_sheet.pdf
However, there does need to be a trade-off. If the government is going to eliminate employers from having non-compete clauses, then the laws on IP theft and Trade Secrets needs to be beefed up so that it is easier to prosecute the individual (and the company they transferred it to) if someone DOES transfer information illegally.
I am curious how the FTC arrived at "banning noncompetes could boost worker's earning by nearly $300 billion annually". Everything I was able to find was just the FTC stating it on a 'factsheet'* which all the media is quoting - but nothing about how they came to that figure.
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* https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete_nprm_fact_sheet.pdf
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SFC Casey O'Mally
COL Randall C. While I don't have the figures, I don't doubt them. Two MAJOR impacts of eliminating non-competes that I can see are 1) increased mobility means companies have to do more to keep good employees, which USUALLY means higher pay or bonuses, and 2) those who DO leave, aren't forced into a different sector where their KSAs are less marketable, often resulting in a pay cut (like the 20% mentioned in the article).
I don't know if the math checks out, but I have no reason to question it.
I don't know if the math checks out, but I have no reason to question it.
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COL Randall C.
*chuckle* ... many, many years of the government telling me to "trust me" has made me skeptical ESPECIALLY when it's a 'projection' figure based on assumptions. I'm like the school math teacher that tells a student to prove his math by showing how he arrived at the answer instead of 'trusting them'.
I agree that non-competes can depress wage competition -- but I'm skeptical of the $300B number until they can show me how that's arrived at - including what assumptions they made. Assumptions aren't bad, but assumptions made on faulty information are.
I agree that non-competes can depress wage competition -- but I'm skeptical of the $300B number until they can show me how that's arrived at - including what assumptions they made. Assumptions aren't bad, but assumptions made on faulty information are.
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SFC Casey O'Mally
COL Randall C. I don't disagree. I think in this case I am less inclined to question the number because I don't care what the number is. This isn't budget or spending numbers, so whether it is $300 or $300B is irrelevant to me. All I care about is is it doing the right thing?
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While I abhor non-competes and think they are absolutely ridiculous in most positions, I also think this is federal overreach. The federal government has no authority here. Even if you REALLY stretch the commerce clause to give the federal government authority, this is something that would need to come from Congress, not from the Executive.
Right idea, wrong methodology.
When I retired, I got hired as a pizza delivery driver for the Domino's on post (my dream retirement job - honestly). It was a franchisee, not a corporate store. On day 1, during my onboarding, they put a non-compete in front of me. Can't work for any competitor for 2 years. I said what about the Domino's off post? Nope. Competitor. What about AAFES? Competitor. Wal-Mart? Sells frozen pizza - Competitor. Pizza Hut in a different state? Competitor. Bakery? Makes dough - competitor.
I turned around and walked out, went to work for a Domino's off post with no non-compete. Which really sucked, because pay was WAY higher on post. But no way I was signing that RIDICULOUS non-compete. I even asked about it, and they said "trade secrets." I said really? As a delivery driver? I'm going to learn trade secrets? Called HR and everything, said I would be happy to sign on if I could skip that. I would even be happy to sign one if I moved in to management. No dice.
Right idea, wrong methodology.
When I retired, I got hired as a pizza delivery driver for the Domino's on post (my dream retirement job - honestly). It was a franchisee, not a corporate store. On day 1, during my onboarding, they put a non-compete in front of me. Can't work for any competitor for 2 years. I said what about the Domino's off post? Nope. Competitor. What about AAFES? Competitor. Wal-Mart? Sells frozen pizza - Competitor. Pizza Hut in a different state? Competitor. Bakery? Makes dough - competitor.
I turned around and walked out, went to work for a Domino's off post with no non-compete. Which really sucked, because pay was WAY higher on post. But no way I was signing that RIDICULOUS non-compete. I even asked about it, and they said "trade secrets." I said really? As a delivery driver? I'm going to learn trade secrets? Called HR and everything, said I would be happy to sign on if I could skip that. I would even be happy to sign one if I moved in to management. No dice.
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