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FTC Bans Non-Compete Agreements. Good Riddance.
This week the FTC announced a new, nationwide rule banning non-compete agreements in employment. The agency estimates that it will “generate over 8,500 new businesses each year, raise worker wages, lower health care costs, and boost innovation.”
There are some reasonable arguments that the rule doesn’t survive legal challenges that the FTC acted beyond its power. But I do think this will inevitably mark the end of widespread use of them.
If you’re wondering how bad these can really be, read this account of a Florida lawyer, Jonathan Pollard, who’s represented employees on this very issue.
50 million Americans or more are subject to or have been subject to bogus non-compete agreements. The estimates of how many people are subject to non-compete agreements are way too low. Just because you don’t hear about non-compete agreements in a certain business or industry doesn’t mean they aren’t there. They are.
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