For the most part, I never got the sense that most people who said ‘If you don’t like your job, just quit’ actually believed any part of job searching and moving up was easily done.
The phrase has been a cruel cudgel to wield against anyone seen as less than, with the implication being ‘This is the best trash like you will get’. And that’s true of anyone from a harried fast food worker to an abused executive. It’s made all the more cruel by the fact that noncompete clauses are baked into employment contracts at every level—from corner office types to cleans the corner office types (and I’ve experienced the latter firsthand)
If you’re unfamiliar, a noncompete clause usually looks like making employees agree to not seek out a job with a competing business and/or in the same field for a set amount of time if their employment is ever terminated (whether by employer or employee). Effectively, these clauses only serve to shift all power in favor of an employer. Since employees can only leverage their presence and expertise as the means to advance in a company, or retain their position, it’s not arguable that the inclusion of noncompetes is a hinderance to economic development amongst the 99%.
So now, in one of a series of efforts needed to keep more people from destitution and stress, the FTC has ruled these clauses to no longer be enforceable nationwide.
From their website:
“Today, the Federal Trade Commission issued a final rule to promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.
Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” said FTC Chair Lina M. Khan. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”
“The Commission found that noncompetes tend to negatively affect competitive conditions in labor markets by inhibiting efficient matching between workers and employers. The Commission also found that noncompetes tend to negatively affect competitive conditions in product and service markets, inhibiting new business formation and innovation. There is also evidence that noncompetes lead to increased market concentration and higher prices for consumers.””
We’ve definitely already been seeing that last part.
CBS News quotes the FTC as citing particularly heartwrenching cases of competent individuals hamstrung by the predatory print:
“In one case, a single father earned about $11 an hour as a security guard for a Florida firm, but resigned a few weeks after taking the job when his child care fell through. Months later, he took a job as a security guard at a bank, making nearly $15 an hour. But the bank terminated his employment after receiving a letter from the man’s prior employer stating he had signed a two-year noncompete.
In another example, a factory manager at a textile company saw his paycheck dry up after the 2008 financial crisis. A rival textile company offered him a better job and a big raise, but his noncompete blocked him from taking it, according to the FTC. A subsequent legal battle took three years, wiping out his savings.”
Note that trade secrets aren’t involved in either of these positions. There’s probably no particular ingredient involved in making sure everyone walking through a building is meant to be there. And there’s definitely no way an employee can or should be faulted for getting off a sinking ship when their pay has been impacted.
Consider how difficult it is to switch industries when you need experience and training if you want to keep at the same level of pay you used to get. Who could go from a sous chef to an electrical engineer at the drop of a floppy white hat? And for those of us more than willing to take a paycut to keep our heads above water, well…the term ‘Overqualified’ isn’t an unfamiliar one.
If you’re a worker, this is nothing but good news, and it only remains to rally together against the predictable challenge to the new rule.
CNBC reports:
“The business groups claimed that the FTC’s ban, “breaks with centuries of state and federal law.”
They allege that noncompete agreements are essential to protecting internal company secrets and proprietary information. The FTC suggested that instead of relying on noncompete clauses, companies should look to other safeguards of information, like nondisclosure agreements.”
I’d like to take this time to reiterate that my employment with a well-known maid service in Austin was sealed with a noncompete clause.
If you’re an employer, it’s up to you to ask yourself:
What will you do to retain your team if the threat of joblessness and all its ills won’t keep them in place? How can you radically shift your mindset if you’re used to an all sticks and no carrots approach?
It shouldn’t have taken new legislation for you to figure that out, but if that was the case? Start upping your produce game.
