Non Compete Agreements

Noncompete agreements are a hot topic in 2024 due to an April ruling by the FTC. While I’m no attorney, I’ll do a brief flyover of non competes, their history and 2024 developments. ✈️

🔒 Noncompete agreements (NCAs) have a long history, originating in 15th-century English common law 🏰. These clauses aimed to prevent apprentices from competing with their masters post-apprenticeship. In the U.S., NCAs became widespread in the late 20th century, evolving into a tool for companies to protect trade secrets, restrict competition and maintain competitive advantages 🔍.

⚖️ States have varied in their enforcement of NCAs. California and a few other states ban NCAs, promoting job mobility and innovation. Meanwhile, other states enforce them strictly, limiting workers’ ability to switch jobs. With all the innovation that happens in California, it’s awfully tough to make the oft stated case that the elimination of NCAs will stifle innovation as companies will restrict information they share with their workforce.

🚫 In 2024, the Federal Trade Commission (FTC) introduced a rule banning NCAs for all employees, including senior executives. This rule, expected to significantly impact the job market, faces legal challenges from business groups questioning the FTC’s authority.

🌍 The ban aims to foster economic freedom, higher wages, and innovation by enabling workers to move freely between jobs. This historic shift reflects growing concerns over the restrictive nature of NCAs and their impact on worker mobility and wages. Personally – NCAs 👎🏻Nonsolicitations 👍🏻.

#noncompete #nonsolicitation #warfortalent