Non-Competes Are on the Ropes How the Proposed FTC Rule Will Affect Employers
Do companies have the right to restrict their workers’ future employment opportunities? Currently, they do throughout most of the U.S. But a Federal Trade Commission (FTC) rule proposed on Jan. 5, 2023, would seek to end the practice by banning non-compete agreements, leaving employers with many questions. Non-compete clauses purport to protect trade secrets by disallowing workers from taking expertise to a competing business. In the past, companies used the agreements sparingly, reserving them for high-wage workers, researchers, and executives who could realistically do significant damage by taking their talents — along with insider knowledge and possibly clients — to the competition. But in recent years, the practice has spread among low-wage workers, which ultimately caught the eye of labor unions and the Biden administration.
A coalition of public interest and labor organizations first petitioned for the rule in March 2019. In 2021, President Biden signed an executive order urging the FTC to regulate non-competes. A rule proposed in 2023 seeks to outlaw them entirely between employers and workers, with a fine of $100,000 for each violation. The rule would also apply to independent contractors and retroactively invalidate existing non-compete agreements. Proponents of the rule argue that current non-competes unfairly restrict worker rights and suppress wages. Barring someone from working in their current industry for any other company severely limits their employment options. But workers often feel they have little power to refuse or don’t even realize they signed the non-compete.
have the authority to bar non-competes from the marketplace. Still, experts expect the rule to pass in some form, sparking an almost inevitable legal battle. As the case winds its way through the court system, the regulation will likely not go into effect for several years. The comment period on the FTC’s proposed rule ends on March 20, 2023, and the agency urges you to submit your thoughts online or through the mail. California already bans non-compete agreements, while North Dakota and Oklahoma restrict them significantly. Other states are considering similar laws. But it’s worth noting that non-competes seem to be the way of the future. Companies that use non-compete clauses should consider how they’ll pivot in the coming years or risk being caught flat-footed.
Critics of the rule, including one FTC commissioner, argue that the FTC does not
IRISH PANCAKES
TAKE A BREAK
Start your March mornings off with a seasonal flair by making these traditional Irish pancakes! Thick yet crispy, these pancakes are a sweet way to fuel your day.
Ingredients: •
Inspired by TheKitchyKitchen.com
2 cups all-purpose flour
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1 large egg, beaten 1 cup buttermilk
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1/2 tsp baking soda 1/2 tsp kosher salt 1 tbsp white sugar
2 tbsp unsalted butter, divided
Directions: 1. In a bowl, sift the dry ingredients together. Set aside. 2. In a skillet, brown 1 tbsp of butter.
3. In a separate bowl, mix the beaten egg, buttermilk, and browned butter. 4. In a constant stream, add the wet mixture to the dry ingredients while stirring. Do not over beat! 5. Heat a skillet over medium-low heat. Add 1 tbsp of butter, stir until the skillet is coated, and then add a few large dollops of batter (about 3 inches wide) to the pan. Do not overcrowd. 6. Cook 4–5 minutes a side, until golden brown and cooked through. Serve with butter, jam, and syrup.
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