Date: June 17, 2024
The Federal Trade Commission's recently proposed ban of noncompete clauses is scheduled to go into effect in September 2024. Utah Business spoke with TELG Scott Oswald on the potential impact of the ban and whether it will survive already emerging challenges against it. In Mr. Oswald's eyes, the ban is "a major step toward workplace fairness."
Quoteworthy:
“Even the corporations that previously tried to choke off their competition will benefit because they’ll need to raise their game. That’s good for everyone.”
R. Scott Oswald
[EXCERPT]
Noncompete ban: A new chapter for workers?
Chalk one up for United States workers.
In April, the Federal Trade Commission (FTC) prohibited the enforcement of noncompete clauses among for-profit U.S. employers. The vote was 3-2 among the FTC’s five commissioners, with two turning a thumbs down because they believed the rule was “unlawful” and “won’t survive legal challenge,” CNN reported.
The final rule is scheduled to go into effect on September 4, 2024. Tens of millions of workers would be impacted by the ban.
Courts hold the key
Perhaps not surprisingly, it didn’t take much time for challenges to the ban to emerge.
“We’ve already seen some challenges to the legality of the FTC’s rule, including the Ryan, LLC case in the U.S. District Court for the Northern District of Texas,” says R. Scott Oswald, managing principal of The Employment Law Group in Washington, D.C. “Big business is obviously threatened and is trying to stop the FTC — or at least to slow it down — until the balance of power in D.C. shifts again, possibly after the November election.”
[…]
Oswald adds that the FTC “correctly” says noncompetes have become a “huge drag” on the U.S. economy by strangling people’s ability to benefit from the skills and experience they’ve worked hard to acquire.
In fact, Oswald even hesitated to call the documents “agreements.”
“The only reason most employees ever signed these documents was that they had no choice,” he says. “Why tolerate this sort of exploitation, which helps a person’s former employer while hurting literally everyone else in the economy? It makes no sense.”
[…]
Oswald says the upside is clear: Utahns will move from job to job with fewer limits, free to maximize their value in the state’s economy.
