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upstart writes:

The US Federal Trade Commission wants to ban non-compete agreements:

The US Federal Trade Commission (FTC) recently proposed a regulation banning employers from imposing non-compete "agreements" on their workers.

[...] The FTC summed up my feeling about non-compete clauses.

It called them "a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses." Thus, the Commission concluded, "By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans."

That, by the FTC's count, is one in five Americans. So it's not just tech or highly skilled jobs getting hit.

As the New York Times pointed out, it also includes sandwich makers, hair stylists, and summer camp counselors. So yes. Seriously, there are non-competes for teenagers working as counselors.

[...] Sure, there are reasonable exceptions. For example, if I leave your company, I have no problem agreeing that I won't reveal your secret sauce to a competitor or use it in my own business.

But the FTC isn't talking about getting rid of non-disclosure agreements (NDA)s — unless these NDAs are written so broadly that they act as de facto non-competes. That's a different and uglier story.

[...] While proprietary business information and technology secrets are what people often think about protecting with non-competes, that's often not the case.

Instead, it's all about making sure your workers can't leave. For example, the US fast food chain Jimmy John's used to forbid its sandwich makers from joining similar businesses within two miles of its stores for two years. The courts finally forced the company to drop that non-compete clause.

Ridiculous demands like that underline the real purpose of most non-compete agreements: keeping workers by hook or by crook for the least amount of pay.

[...] If you want happier, more productive staffers, don't handcuff them to your company with non-compete agreements. It never ends up well for anybody.

Have any of you been asked to sign an outrageous non-compete?

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