Noncompete Contracts: Protecting Businesses or Restricting Workers' Options?
Summary from the AllSides News Team
Following the Federal Trade Commissions’ decision to ban noncompete contracts, voices across the spectrum are reflecting on what the decision means for workers, businesses, and regulatory practices.
Win for Workers: A writer in Bloomberg (Lean Left bias) praised the FTC’s decision as a victory for workers’ rights, arguing that “The problem for businesses is not that they will lose trade secrets or valuable investments in workers to competitors. It’s that they just lost bargaining power to workers — and that’s exactly what the FTC intended.” The writer concluded, “If it should be easy for employers to fire workers, then it should also be easy for employees to quit. And that requires workers to have the right to take a better job. By allowing workers to move freely to roles where they are most valued, the FTC is fostering a competitive and fair labor market.”
Washington Overreach: The Wall Street Journal Editorial Board (Lean Right bias) argued the FTC is overreaching and had “effectively invalidated tens of millions of employment contracts without authority from Congress.” While noncompete contracts “may frustrate some workers,” the board argued these contracts “protect an employer’s intellectual property and investment in worker development,” and employers are “usually are willing to negotiate less restrictive covenants to protect their trade secrets and training investments.” The board concluded that the regulation on these contracts should be done at the state level, stating, “State and local lawmakers can better balance such tradeoffs for their constituents than can bureaucrats in Washington.”
Featured Coverage of this Story
From the Right
The FTC Decrees: No More Non-Compete AgreementsIs there anything that Federal Trade Commission Chair Lina Khan doesn’t think she can do? Apparently not. On Tuesday she and her fellow Democratic commissioners effectively invalidated tens of millions of employment contracts without authority from Congress.
The FTC’s 570-page rule outlaws so-called non-compete agreements across the economy. Employers use these agreements to restrict workers from joining competitors or starting their own firms for a specified duration after leaving. They protect an employer’s intellectual property and investment in worker development.
The FTC says such agreements “restrict the freedom of American...
From the Center
The FTC is banning noncompete agreements. Did your job search just get easier?Federal regulators are tearing up the controversial agreements that forbid millions of workers from taking jobs at companies that compete with their ex-employer. But noncompete clauses might not be gone for good, employment lawyers say — at least, not yet.
More than a year after proposing to block most noncompete agreements, the Federal Trade Commission’s top officials voted 3-2 on Tuesday to do just that.
Under the FTC’s ban, employers would have to tell workers their noncompete agreements are no longer enforceable. The rule also would ban most noncompetes in...
From the Left
FTC Ban on Noncompetes Is a Victory for the US EconomyIt’s easy to understand why the US Chamber of Commerce is so upset about the Federal Trade Commission’s decision to ban noncompete agreements. The problem for businesses is not that they will lose trade secrets or valuable investments in workers to competitors. It’s that they just lost bargaining power to workers — and that’s exactly what the FTC intended.
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