FTC Proposes Rule Banning Non-Compete Clauses Nationwide
On January 5, 2023, the Federal Trade Commission (FTC) proposed a ban on the use of non-compete provisions in employment contracts. The ban would also require employers to nullify any existing non-compete clauses within six months of activation. The proposed rule applies to all employees and independent contractors, paid and unpaid workers, and businesses of all sizes and location. This is a far-reaching move that has the potential to raise wages and increase competition among businesses.
Proposing to Ban Noncompete Agreements, the FTC Plays its Strongest Hand
On January 5, 2023, the Federal Trade Commission (FTC) published a proposed rule that would categorically ban noncompete agreements between employers and a broad class of “workers,” including independent contractors, volunteers, apprentices, and even sole proprietors who provide services to clients. By pushing for markedly extensive change, the FTC has played its strongest hand. Consequently, the federal government should anticipate that an abundance of litigation will be initiated by the corporate sector’s major players, who will fight for middle-ground legislation.
The FTC Non-Compete Ban Proposal
The Federal Trade Commission (FTC) recently proposed a ban on non-compete clauses in contracts between employers and their employees. The FTC estimates this ban could increase American earnings in the range of $300 billion per year, while also allowing for lateral movements across business sectors and more career opportunities for employees. The FTC’s primary mission is to protect both competition and consumers with this proposed ban. Through Section 5(a) of the FTC Act, the FTC has the power to investigate and prevent unfair methods of competition and unfair or deceptive acts or practices affecting commerce.
To Compete or to Non-Compete: A Look Into the FTC’s Proposed Ban
On January 5, 2023, the Federal Trade Commission (FTC) released a proposal to ban employers from the use of non-compete agreements with their workers. The FTC’s motivation behind the proposed rule is the protection of American workers, with the regulatory agency stating that non-compete agreements restrict about one in five American workers – about 30 million people. Additionally, the agency estimated that the rule could increase wages by $250 to $296 billion a year across the economy. Since seeking public comment on the ban, the FTC’s broad non-compete proposal has been met with both support and criticism.
How the FTC’s Proposed Non-Compete Rule May Impact Non-Profit Hospitals
On January 18, 2023, the Federal Trade Commission (FTC) proposed a new rule for regulating non-compete clauses. The proposed rule, which has been named the “Non-Compete Rule,” could potentially ban employers from entering into, or attempting to enter into, a non-compete clause with employees and independent contractors collectively referred to as “workers.” The proposed rule has recently sparked several discussions on the scope and constitutionality of the rule. One concern is how the proposed rule, if finalized, would impact the healthcare industry and especially non-profit hospitals.
Return of the Union: How Workers are Organizing and Corporations Are Trying to Stop Them
In the last few years, especially after the start of the COVID-19 pandemic, there has been a noticeable growth in US labor organizing. Workers all over the country, from both large corporations and small companies, have gone on strikes and began forming labor unions in an effort to get better wages, working conditions, and benefits. Most recently, employees at large rail unions rejected a tentative deal to avert a walkout in September 2022 after it failed to adequately address their concerns. This is the latest, but certainly not the only, instance of workers demonstrating their increased bargaining power. We have also seen increased unionization movements by corporate employees at corporations like Amazon, Google, and Starbucks. However, as more corporate employees attempt to unionize, corporations have begun to push back, and the National Labor Relations Board (NLRB) has stepped in to put a stop to blatant anti-unionization efforts.
California’s COVID-19 Workplace Requirements Continue to Evolve
Emily Zhang Associate Editor Loyola University Chicago School of Law, J.D. 2024 On October 13, the California Department of Public Health’s (CDPH) issued a change to the California Division of Occupational Safety and Health (Cal/OSHA) Covid-19 emergency standard and issued a revised proposal for the non-emergency standard. The order updates the definition of “close contact” …
What the Proposed Illinois Workers Rights Amendment Means for Your Company
November 8, 2022 marks the day Illinois constituents vote for midterm elections. That is if they have not already sent in early ballots. On the ballot this year, voters will see a proposed amendment that would add a new section to the Bill of Rights Article of the Illinois Constitution that would guarantee workers the fundamental right to organize and bargain collectively, and negotiate wages, hours, and working conditions. This post breaks down this new amendment, looks at the greater political debate, and analyzes how it affects Illinois businesses.
OSHA’s New Directive: An Incentive or a Drawback?
In September 2022, the Occupational Safety and Health Administration (OSHA) issued a new instruction which broadens the scope of the agency’s inspection program, the Severe Violator Enforcement Program (SVEP). The previous directive, which went into effect in 2010, allowed OSHA to place employers in the program if its employees committed certain serious violations, especially if they had already been cited for the violation once or received a failure-to-abate notice. The new instruction allows OSHA to place employers in the program that probably would not have met the criteria in the previous directive.
Employment Contracts: The History of Non-Compete Agreements and the Future of Garden Leave Provisions
Non-competes are a traditional approach for employers seeking to place a restrictive covenant on an employee post termination or resignation. Recent studies show as high as 39.8 percent of all private sector employers are requiring non-competes, regardless of age or position. These agreements are typically signed by an employee near the date of hire, or over the course of employment, and typically limit the employee from working for or with competitors post-employment; sometimes even placing further restrictions regarding geographical areas or time periods.