your non-compete isn’t illegal after all (at least not yet)

by Alison Green on August 21, 2024

Remember back in April when the Federal Trade Commission announced it would ban non-compete agreements for most U.S. workers, saying they stifle wages?

That was supposed to become law next month, but yesterday a judge in Texas blocked the new rule, saying the agency lacked the authority to issue the rule.

The FTC is likely to appeal the ruling.

Non-competes are already banned in California, North Dakota, and Oklahoma, and 11 more states and Washington, D.C. prohibit them for hourly wage workers or workers below a salary threshold.

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  1. online millenial*

    If I had a dollar for every time the Fifth Circuit gutted attempts to give people more rights, I could retire. It’s absolutely unbelievable that extremist judges in one part of the country can make decisions like this–especially because companies know to sue in that circuit to get a favorable decision. (This is the same court that’s deciding whether or not the NLRB is unconstitutional.)

    1. Evan Þ*

      There has been some pushback from both political sides against national injunctions, where one circuit or district court can block something for the whole country. Nothing has actually come of it yet, though – which is unfortunate in my opinion.

      1. Jasmine Clark*

        I never understood why that’s even possible. How can one judge do something that affects the whole country???

        1. Enough*

          Because it’s at the federal level and it depends on exactly what basis they are suing and if there are possible constitutional issues. 3 courts have ruled. 1 for the ban, 1 against the ban, 1 that ruled against the ban but is limited to specific states.

      2. Sola Lingua Bona Lingua Mortua Est*

        I don’t that is necessarily a bad thing. It is here, now, because it’s a policy we like, but it’s not hard to imagine a policy that we would dislike and prefer be blocked by an appropriate court (temporarily on its journey to the Supreme Court).

        Really, congress just needs to do its job instead of agencies and lower courts creating new law.

        1. Kevin Sours*

          There are supposed to be rules about how these injunctions are handled that these judges are blatantly ignoring. And it’s not an accident that this is coming out of Texas, things are set up there so if you file in the right place you be certain to get a judge that will rule lawlessly in your favor.

        2. Evan Þ*

          Sometimes it’s a bad thing; sometimes it’s a good thing. Myself, I think it’s a bad thing on balance. Without universal injunctions, other people could always sue for injunctions in the other circuits.

          But yes, I agree the real fix is for Congress to do its job. Unfortunately, I don’t see that happening anytime soon.

        3. RPOhno*

          It’s important here to understand that Congress typically passes laws to establish regulatory agencies and grant those agencies the authority to draft regulations on a specific topic. Congress has reviewing authority over the detailed regulations, but does not draft them or enact them.

          For example, Congress established OSHA and granted them authority to regulate occupational safety and health in the US, and established specific boundaries on what OSHA did and did not cover, but Congress did not draft chapter 29 of the Code of Federal Regulations. That isn’t Congress’ job, that’s OSHA’s job, and allowing judges to override the Congressionally chartered authority of regulatory agencies without any real check or balance can become a sketchy precedent

          1. CourtOverlords*

            Except the supremes just significantly reduced the ability of agencies to function as designed. It’s going to be one gigantic mess.

        4. Jasmine Clark*

          congress just needs to do its job

          If that’s the solution, we’re all in trouble… lol.

        5. Artemesia*

          We have a Congress with one side firmly committed to blocking legislation and archaic rules that allow a minority to block the. majority. So the silent filibuster in the Senate means they don’t even have to speak for hours they can just block bills. We are not likely to see a supermajority anytime in our lifetime that can overcome this. The goal of the billionaire backed right wing groups that now vet judges and take actions like the Texas one is to end regulation — health regulation, labor regulation, environmental regulation. Given the corrupt SC chosen by these groups, this is now coming to pass.

      3. kalli*

        There was a conflicting ruling in a different court at the same level so there’s a decent shot of getting an appeal to a higher court approved to get that sorted out.

    2. CityMouse*

      These judges exist to gut progress like this. If this infuriates you, and you’re in the US please check your voter registration and make a plan to vote. It’s pretty impossible to get these people off the bench, but you can stop more of them from being appointed.

      1. online millenial*

        Oh, I’m registered, and I’m writing postcards to voters in other states to encourage them to vote as well. Voting is step one of the plan, though: we have to elect officials that we can then push towards the court reform we desperately need. Because this is not sustainable.

      2. Kevin Sours*

        Even if you think you are registered it’s good to check. A number of states are aggressively purging voter registrations as part of vote suppression effort. So even if you registered and vote regularly if you live in one of those states (Texas is one of the more notable) you may have been removed.

        1. sofar*

          Yes! My husband was purged in TX years ago. I put out a reminder on all my social medias for everyone to check and check again.

          Usually, this happens if you 1. Skip elections (haven’t voted in however-many years) and 2. If you move. You’ll get a mailing asking you to “confirm” your address. If you don’t respond (because you didn’t update your address, or think the thing looks scammy), you get purged. So it really penalizes people who rent/move a lot. Or just don’t check their mail.

          Even if you haven’t moved in 20 years or if you vote in every election, still check! My friend got purged despite owning her home for years and voting regularly. And it happened close to the 2020 election registration deadline, so she had to scramble.

          1. CV*

            Or if you are a Democrat or have a name that a bigot thinks is nonwhite.

            There have been news stories about groups encouraging people to go through voter rolls and object to people; some states let you do this as a private citizen.

            Do a news search for “purge voter rolls” and you’ll see details.

            1. MigraineMonth*

              I live in a college town where a while back the Republicans decided to object to every same-day registration during a presidential election. Every. Single. One. Meaning that most of the college students had to cast a provisional ballot and later come back with someone who would sign an affidavit affirming that they lived in the town.

            2. Peanut Hamper*

              Or live in a house with a lot of other adults, because apparently only white America has homes with two adults in them. Meanwhile, poor people, college students, immigrants, and POCs will often live in houses with several generations, siblings, cousins, roommates, and other people who can no longer afford a home on a single income.

              1. I Have RBF*

                LOL.

                Only conservative wealthy white America lives in homes with only two adults in them. The rest of the country has multi-generational households and collections of roommates.

          2. Goldfeesh*

            My mom was purged in Iowa in the 2016 election. She had to vote provisionally because the only thing that came up for her in the voter rolls was in her maiden name that she hadn’t voted under since she had been married since 1958. And she had voted ever since the Kennedy election in 1960. Weird stuff going on.

            1. Artemesia*

              A whole order of nuns was not allowed to vote in the 2016 election. They had lived in their convent for decades and always voted.

          3. Elizabeth West*

            I actually requested that my old state take me off the rolls after I moved. I didn’t want to get accused of double dipping. I checked and I’m not on there anymore.

            When I changed my driver’s license to here, they automatically registered me. I missed the primary — I hadn’t done the license change yet because it had to be done in person and I could barely walk, but I’m all ready now. Still, I will keep checking before every election, just in case.

        2. LikesToSwear*

          It’s also good to check if you should NOT be registered somewhere. I moved across the country at the beginning of 2009. When a friend randomly posted on FB in *2020* about how to check your registration for my home state, I did so. I was STILL registered there, despite not having lived there for over a decade, and having missed 2 presidential elections. I *should* have been purged from the rolls, based on the laws in effect at that time. When I called to ask why I wasn’t, they were not helpful – simply told me that I was still registered and could just go vote (which would have been highly illegal).

          I ended up having to find the form to request that they remove me from the rolls and submit that.

          While I don’t agree with extremely aggressive purging, they do actually need to purge the rolls in accordance with the laws that are in place.

    3. JelloStapler*

      and often the same ones who claim “FREEDOM”- clealr yonlt for certain people and entities.

  2. Anon in Canada*

    “Texas federal judge blocks a progressive law nationwide” – I would have thought it was Matthew Kacsmaryk. But not this time.

    1. CityMouse*

      I’m an attorney and I can’t tell you just how much of what I learned in law school has been just utterly ignored or thrown out in the past 5 years. It’s unbelievably depressing.

      1. MigraineMonth*

        I learned a lot about checks and balances when I was in middle school, and no one being above the law. No one told me that was “except federal judges”.

        The federal judiciary *doesn’t have to follow civil rights law* (such as non-discrimination and sexual harassment rules). Supreme Court judges are evidently exempt from ethics oversight and, apparently, common sense.

        I do not envy middle-school teachers trying to explain this to their students right now. “A president is different from a king or dictator because… um… I’ll get back to you on that one.”

        2. Meep*

          This is why I want Biden to do something extra nutty, but otherwise mild to prove a point. Like declare that all single-scoop ice cream cones are $1.50 for a day.

      2. Artemesia*

        I don’t know how law school profs can teach things like Constitutional law anymore. Basic things like, you have to have standing to have a case heard have been ignored. And of course stare decisis is not longer the practice. So we have lots of faux cases where there is no one with a real interest in the outcome who is still allowed to sue in a court packed with MAGA appointees.

    2. Ally McBeal*

      That was my VERY first thought. I don’t think this bodes well for the FTC or any of us.

    3. Princess Consuela Banana Hammock*

      We’ll return to the world of nebulous and conflicting pre-Chevron standards, all of which involve more judicial involvement and scrutiny and less deference to agencies. People’s opinions of agency deference tend to shift with their feelings on the governing administration. The current SCOTUS is not a fan of the administrative state, and they will continue to issue opinions largely dismantling public-health-and-safety protective policies claiming that they’re bad for businesses. [Although the rationale, here, is agency overreach — i.e., the FTC went beyond its mandate with this rule.]

      What’s fascinating about this issue is that non-competes are literally anti-market agreements that constrain worker mobility. If you read the California and Oklahoma case law banning them from enforcement, the decisions read like a full-throated defense of market capitalism. If the issue were the free market, the courts would let the ban roll forward.

      1. Iris Eyes*

        I work in an industry slightly adjacent to the one Chevron is in and the general mood was yay, but I’m over here thinking about the absolute nightmare that is small jurisdictions with conflicting standards increased legal costs having to potentially restructure based on conflicting standards and lots of decrease in consumer trust and goodwill as activists fight and news stories come out. Judges DO NOT have the data literacy to be able to make rulings on technical matters. You can massage statistics to say just about whatever you want and many times it takes someone pretty specialized to be able to smell out a paper that is missing key elements. Also the potential for judges to be weaponized against companies in different financial positions (either favoring the judge’s brother-in-law small business or a transnational company taking advantage of its ability to adapt and absorb costs until small competitors are out of business)

  6. evens*

    Non-compete clauses are really important in some industries. A blanket ban honestly doesn’t make sense. However, in many (perhaps most) cases, they make the worker suffer with no real benefit for the company, other than keeping a worker that wants to leave.

    Like with anything, there is nuance.

    1. Curious?*

      Could you expound?

      What ideas, concepts, or duties are so “important” that an employee must be prevented from working another job regarding such ideas, concepts, or duties?

        1. Unsure about that*

          In the tech industry people move around a the time…bonus points for the layoffs taking place in that sector.

          1. Sola Lingua Bona Lingua Mortua Est*

            It’s all but mandatory if you want to keep your Alphabet Soup going. You’re either in the role you intend to retire from, you’re less than 36 months from your next role, or you’re a Sr. Executive.

        2. Kevin Sours*

          Apple is famously headquartered in Cupertino where Non Competes have not been legal since at least I started working thirty years ago.

          1. Resident Catholicville, U.S.A.*

            But presumably NDA’s are fine? I’ve listened to a few podcasts with current and former Apple employees and boy howdy, they’re pretty tight lipped about what happened and is currently happening there.

              1. I Have RBF*

                NDAs (non-disclosure agreements) are reasonable. You don’t want your IP walking out the door. I’ve had to sign NDAs to do interviews in tech.

                1. Kevin Sours*

                  The can be reasonable. However they also commonly abused and there is work that needs to be done to rein them in.

            2. Princess Consuela Banana Hammock*

              NDAs are enforceable in California, but they are hugely different from a noncompete. That said, there’s been litigation in California about Apple and other tech companies engaging in antitrust activity by tacitly agreeing not to “poach” one another’s engineers in order to keep wages below market value.

        3. celery*

          Right, but then that means Apple has a strong incentive to make sure that their best and most important engineers are happy, and that if they have to lay people off, that they get a pretty generous severance. It’s the free market at work – there is increased demand from competitors for your best people, so you need to work harder to remain competitive to keep them.

          (I’m using Apple as an example since you mentioned it; as has been mentioned, Apple is headquartered in a place where non-competes are not legal anyway).

        4. AnonForThisOne*

          Then Apple needs to keep their employees happy. They aren’t taking company secrets… just their brains.

        5. Antilles*

          Tech is a very bad example to use here, given that non-competes have been unenforceable in California for something like 60 years. The massive growth of Silicon Valley has happened in a state without non-compete clauses, so it’s pretty obvious that tech doesn’t need non-competes to succeed thrive.
          In fact, it likely goes the other way: There’s a common argument among economists and market specialists that part of the reason the tech industry succeeded so well in Silicon Valley is BECAUSE of the ban on non-competes. Effectively that the ability for employees with good ideas to move around helped stimulate competition and innovation.

      2. LoraC*

        I personally do not think this is “important”, but one example I know of was a martial arts school that made their instructors sign non-competes. Their rationale was that if the instructor left to teach at another nearby school, all their students would follow them to the new school and leave the first school out of business. So their non-compete was that the instructor could not teach at another school within some X-mile radius of the first school.

        It makes sense if the distance was reasonable, unfortunately in my example it was something absurd and stretched 2 towns away.

        1. Stipes*

          But also…

          to me, that example seems illustrative in an entirely different way. If all the students really would follow the instructors to a different school, that implies that the instructors bring all of the actual value to this enterprise and the schools themselves contribute nothing. The schools could be trying to attract and retain good instructors by having a robust and supportive system within which to teach your classes. And by paying well. But instead they just want to make it illegal to work anywhere else?

        2. AnonForThisOne*

          No it doesn’t. If you are concerned about a good employee leaving, treat them like it. Non competes merely mean you don’t have to care about your employees as they literally have to stay with you if they want to work.

      3. Retired editor*

        My family has a couple of veterinarians who have worked in group practices. If a vet builds up the customer base of the group practice, then takes that book of business with them to start a rival practice, it can devastate the original practice’s financial viability. Noncompete agreements are a practical protection for a business that has provided facilities, support staff, and possibly specialized training to the group of veterinarians in the group practice.

        Pet owners, think about the veterinarians you use. In some cases, my family’s pet owners are closer to and more loyal to their (family or non-family) vets than they are to the medical staff at their clinic or urgent care center. But several said they know their dentists better than their physicians or nurse practitioners. My “banker” is basically a young salesman (who keeps changing), but my financial advisor knows me and we do have a professional relationship. So, I can see that the advisor could be subject to a noncompete, but my bank has so much churn among the branch bankers that I don’t think the bank should be able to enforce a noncompete. It’s complicated.

        Allowing one veterinarian to cannibalize the practice by becoming a direct competitor at any time makes forming and financing a group practice much more precarious. Financing the facilities of the practice is less viable when one of the principals in the practice can leave and go elsewhere at any time.

        Professional services groups that depend on personal relationships or the reputations of the principals should be allowed the protection of noncompete agreements. Most workers do not work for such employers, and they should never have to comply with noncompetes and should be allowed to move from employer to employer freely.

        I disapprove of this judge’s decision, but I am not surprised because law firms are among the employers who can be badly hurt when a star lawyer splits with the firm. Probably most judges are aware of this, and in my opinion it will likely bias their view of noncompete agreements. The FTC decision was welcome, but it was not well thought out. Time to rethink and rewrite to serve the different constituencies.

        1. Perihelion*

          I can see how that might be really challenging for the vet practice, but on the other hand, what are the vets themselves supposed to do? Are their choices work for that practice permanently or move to another town if they ever want to leave? Neither is a fair expectation for them.

    2. Higher Ed Admin*

      I’m genuinely struggling to think of an example in which a noncompete is really important for reasons other than penalizing an employee who wants to leave by saying that they can’t work in their chosen industry for x amount of time. There is legislation around trade secrets, so non-competes don’t really fill a gap there. What would be a place where a non-compete is important and isn’t penalizing a worker? (Totally willing to say “good point” if there is one; I just really can’t think of any, including thinking of fields like engineering, chemistry, laws, etc.)

      1. Sola Lingua Bona Lingua Mortua Est*

        I’m genuinely struggling to think of an example in which a noncompete is really important for reasons other than penalizing an employee who wants to leave by saying that they can’t work in their chosen industry for x amount of time.

        Stunting/suppressing wage growth.

        2. Higher Ed Admin*

          I actually considered this under “penalizing someone who wants to leave” (because not being paid enough is a HUGE factor in wanting to leave for many people) but I definitely did not spell it out!

      2. CityMouse*

        My Dad is a retired pediatrician and non competes are incredibly common in his field. He had a coworker who was a pediatrician in a high demand field who wanted to step down to part time because her son had some health issues and she was getting overwhelmed. Her current clinic said no and refused part time. She found another hospital that was willing to take her on part time and her old hospital refused and threatened her with a non compete and threatened to sue the other hospital. She got a lawyer but it took months to sort out. She ended up driving for Uber to help pay for the lawyer when she couldn’t work. A highly in demand doctor side lined because she wanted to go part time for her sick kid. Non competes are evil.

          1. CityMouse*

            Absolutely. My Dad felt bad about returing well into his 70s because his waitlist was 8 months long.

      3. Kevin Sours*

        California provides two exceptions (as did the Federal regulations that appear to have been modeled on California law).

        You can enforce a non compete as part of a sales contract of a business preventing the sellers from competing with the buyers for a period of time.

        You can enforce a non compete as part of a partnership agreement to prevent the individual partners from competing with the partnership. This can extend for a period of time after a partner leaves the partnership.

        These seem reasonable to me.

        1. Kevin Sours*

          That was actually a serious question. If there is going to be “nuance” we need to look into which industries might need them rather than a vague assertation that a “blanket ban makes no sense” without any evidence provided.

          I submit that Jimmy John’s is not an example of an industry where non competes are “really important”.

          1. ScruffyInternHerder*

            Correct, but they had to settle lawsuits in the past decade or two over this very thing. So I guess at least the courts agreed there?

            1. Kevin Sours*

              My recollection is that it was mostly the bad PR rather than deficiencies in the cases but it did prompt Illinois to ban these kinds of non competes.

    4. MigraineMonth*

      I think a non-compete is too blunt even for the industries where they seem to be important for business today.

      If you have a concern about people stealing intellectual property, have employees sign an agreement where they won’t use the intellectual property at a competitor for a few years; that’s what the tech industry uses instead of non-competes.

      If you don’t want someone leaving and taking your clients, make an agreement about that up front, or make your business good enough clients don’t want to leave.

      If you don’t want someone taking the training and then immediately leaving for greener pastures, I guess you could create a contract where you would have to pay back the training costs; or you could make your jobs competitive enough people wouldn’t choose to leave.

      If you don’t want someone learning how the business works and starting a successful competitor, make your business good enough that a brand-new competitor with hardly any experience in the industry can’t outcompete yours.

    5. Princess Consuela Banana Hammock*

      There are few industries where the policy arguments for a non-compete, which is an extremely burdensome and often oppressive tool, cannot be achieved through less oppressive or less intrusive tools. Trade secret law, nondisclosure agreements, embargoes on customer lists, etc., have all been used effectively in states that ban noncompetes. If someone’s experience and knowledge is so vital to your company that you cannot tolerate them going out on their own or moving to a competitor in a year, then pay them for the year they’re required to sit out of the market. Once companies internalize the costs instead of imposing them on workers, it’s amazing how many “critical” policy tools, like noncompetes, fall by the wayside.

    6. AnonForThisOne*

      There’s not a single industry in which a non compete has any value to anyone but the employer

      1. MidwestIsBest*

        I’ve always felt that my non-compete DID benefit me. Because I’ve agreed to a non-compete, my employment contracts stipulates that if my employer were to part ways with me, they must pay me a full year’s salary, as well as a prorated portion of my annual bonus. I can’t imagine they’d be that generous with my severance were it not coupled with a noncompete! While I feel terrible for worrying about this— Allison has made it clear that employment contracts are uncommon— my first thought was that this law puts my severance, which has always given me a great peace of mind, in jeopardy. But are non-competes that are part of severance agreements treated differently/not subject to this law?

        1. Just Another Cog in the Machine*

          But if you like working there but they refuse to pay you market value, you can’t leave to go to someone who would. You’re stuck or have to find another kind of job.

          1. MidwestIsBest*

            True, but I would never sign the contract in the first place in any given year’s negotiation if they weren’t paying me market value– I generally like that it gives me a framework for negotiating every 2 years and an exit plan to go do something else if we can’t come to agreement in that time. It just means that if I want to leave, I need to do it within my notice period in any given year…and I can live with that! I trust that any employer that really wants to hire me can work around that notice period, if they’re motivated enough/want to hire me badly enough.
            And I’m never being kept from earning any income– sure, I can’t take another job during that 1-year non-compete, but I’m also getting my full salary and benefits, plus some additional perks, as previously negotiated, during that year, so I guess it’s always struck me as being at least as good of a deal for me as for my employer. Maybe that’s short-sighted, or maybe it sounds lazy to admit that I’d rather get paid for a year to do nothing than be kicked to the curb and have to find something new. But I’ll admit that even though I feel guilty about it, my first response to this law was “hey, ok, great, this is probably better for most people and I know I should celebrate that, but dang, I’m really worried about what this means for me.”

        2. nuff said*

          Non competes work when there is financial consideration is given for the amount of time you cannot work for a competitor.

    7. CTT*

      I’m a transactions attorney and will stand up for one category of noncompete, which was excluded from the FTC’s rule: noncompetes for the seller of a business. These are important because it is unfair if someone, say, sells their hair salon, the purchaser does their due diligence and thinks that based on the number of hair salons in the area this is a viable business, and then two months post-closing the seller is like “retirement is boring, I’m going to open a new hair salon!” and solicits all of the clients and employees away from the old salon. A purchaser always assumes risk when buying a business, but the risk isn’t supposed to be from the person you did the deal with.

      I know that the focus of the law and this thread is on employer-employee noncompetes (which I do think are usually punitive in comparison to what an NDA can accomplish to protect employer interests), but I have also had so many clients who sold businesses call to ask me about this that I have like a Pavlovian reaction to make this distinction now.

      1. Paint N Drip*

        That makes sense!! As a non-law person, this noncompete category seems legitimate and not punitive

    8. I strive to Excel*

      Sorry, no, I don’t agree.

      There are industries where information privacy and non-disclosure agreements make sense. “You may not retain any client contact information that you acquired through this job” is reasonable. “You may not retain any tech blueprints that you developed here” is reasonable. Both of these are best enforced if you have good electronic policies. There’s also a space for “you may not move directly from a business to a job which regulates that business or vice versa” (see the SEC rules about moving from being an auditor to being an executive at the auditee – there’s about a year cooldown rule so that you don’t end up auditing your own work or other similarly sticky ethical situations).

      None of those are non-compete clauses.

    9. Ginger Cat Lady*

      Important for WHO? Important for the individuals? Or important for the corporations to be able to limit and control employees?
      I notice you don’t mention a specific industry or make a specific argument for why. I find that to be a huge cop out.
      This all really boils down to this: Companies should not be able to limit or restrict the options of employees after they leave. Period. People have the right to get work in their field. Unless companies are going to pay people their full salaries just to wait out the noncompete, they don’t get to interfere with a persons ability to earn a living.

    10. Disappointed Australien*

      I like the approach that says non-competes are valid for exactly as long as the employer wanting one keeps paying the salary of the worker who signed it. If it’s not worth whatever salary the worker was getting paid to you, it’s definitely not worth pursuing in court.

      I’ve signed them in the past, and with reason, but with software it is a lot more short term most of the time. Knowing what a FAANG is working on as “the next big thing” in great detail is worth a lot this month, but the closer we get to release date the less that’s worth. In that situation paying me $100k to not work* for six months is worth while, paying the receptionist $50k/year for five years to stop them receptionising anywhere else doesn’t seem to have any value.

      (* amusingly “in a related industry” was in the contract so I got a job in an unrelated industry and kept the money)

    11. Artemesia*

      Used by places like Jimmy Johns, they are just designed to keep low income workers without options — because of all the secrets to making a sandwich doncha know.

    12. Treena*

      This is why I really like the French system. Any company can require a non-compete, but if they want to enforce it, they have to pay you. Very logical imo–we say you can’t work at xyz companies for 6 months? Ok, we will have to compensate you for our requirement.

      Most contracts have a non-compete in them, and then the company has a very limited amount of time to withdraw their right to hold you to the non-compete when your contract terminates. Most companies withdraw their rights.

  7. Going Anon and On*

    A few years ago, I once heard a radio host explain how non-compete clauses work in his industry, such as for radio hosts. If I understood him correctly, as per their union agreement, they usually last for 90 days and they pay you for the entire non-compete period. So if there is a good reason for the non-compete agreement, you don’t lose any salary. If they decide it’s not worth paying you, then you are released and can work anywhere else immediately. I think this is a fair way to do it.

    1. Sola Lingua Bona Lingua Mortua Est*

      Most non-competes aren’t so comfortable. I walked away from a job with one where my sole compensation was the job itself while I held it, and it would have no expiration period. I’d effectively be signing away my ability to work in that industry–an industry the employer defined as “using postage stamps.”

      That’s actually not even the most odious of the terms that prompted me to walk away from that job.

      1. Audiophile*

        “Using postage stamps”? What does that even mean? That sounds like everything from USPS to stamps dot com. That’s unbelievably broad.

        1. Sola Lingua Bona Lingua Mortua Est*

          And banks and utilities that send out physical correspondence, advertising… yea, pretty much I could volunteer at a soup kitchen and have a bowl on my breaks had I agreed to it.

      2. MigraineMonth*

        I used to work in hospital IT. Everyone was under a two-year non-compete where we couldn’t work for any direct competitor after leaving, and a one-year “non-compete” where we weren’t allowed to work for any consultant, client, vendor or potential vendor.

        What that actually meant is that after the company told me to resign, I couldn’t work for any hospital in the entire Midwest. Nor could I work for any company that designed software for hospitals, because they were all “potential vendors”. Nor could I work for a company that configured and installed software in hospitals. Everyone was so afraid of pissing of my company (which was powerful, litigious and petty) that they wouldn’t even interview me until the year was up. I had to either leave healthcare IT or the Midwest to find a job.

        Every person who leaves (is fired by) that company gets to go through that.

    2. Daughter of Ada and Grace*

      I remember something similar when the meteorologist for a local TV news station got offered a position as the chief meteorologist at a different local TV news station. (I think his gap was 6 months between the last day at the old station and first day at the new station.) The non-compete only applied because he was staying in the same market – if he’d been moving to take a comparable job in a different market, he could’ve started immediately.

      1. Going Anon and On*

        That recently happened in my market. But the station he left decided to waive the clause and let him start working almost immediately. I wonder if they decided that was a better option than paying him to do nothing for 3-6 months.

    3. Ally McBeal*

      When I worked on Wall Street, we called that noncompete period “garden leave,” and typically the new employer will pay the new hire for however long the leave lasts, usually 3 months. Technically they’re not supposed to do any work at all (they’re being paid to metaphorically putter around in the garden) but I think there’s some wiggle room to negotiate on that.

      1. TheBunny*

        This phrase is still used. Most recently I heard it regarding a Team Principal in F1. It’s definitely the same as paying out the non compete.

    4. Princess Consuela Banana Hammock*

      Unfortunately, this is not the norm for noncompetes. Some industries pay people reasonably for the period while they’re embargoed, but many will try to enforce a noncompete for an unreasonable amount of time or for an unreasonable geographic region, and without compensation while the person is out of work. This is especially true in fields where unionization is low or where there are not external policies about how long a person has to take a “break” before switching firms (e.g., finance).

    5. I strive to Excel*

      Non-competes would probably be both less used and less onerous if companies were required to pay employees full salary for the period of the non-compete!

      1. MidwestIsBest*

        This is what mine does and I had no idea until reading the comments here that that wasn’t the norm. It seems wildly egregious (and like YES, it should absolutely be illegal) to prevent someone from earning an income elsewhere in your field without paying them during that timeframe yourself. WOW!

  8. Zephy*

    If the Federal Trade Commission “doesn’t have the authority” to issue a rule like this, then Literally Whomst The F*** Does, my guy?!

    1. Anon in Canada*

      Congress.

      It’s called the “nondelegation doctrine” – the idea that Congress has to pass these kinds of laws, rather than have regulatory agencies issue rules.

      Good luck getting Congress to ban noncompetes as long as the filibuster isn’t abolished, though.

    2. ArtK*

      In June, SCOTUS handed down a ruling that severely hamstrings the ability of the executive branch to make regulations.

    3. Going Anon and On*

      The current argument is that all rules and regulations need to be passed by Congress, not implemented by agencies. All of them. (Not my argument.)

      1. kalli*

        The whole concept of delegated legislation exists so people with specific expertise can make better laws that make sense in their relevant specific contexts, but no, a bunch of people who got elected have to handle everything even if they don’t fully understand it all, or make it so inspecific that the courts have to sift through a zillion pages of technical jargon and go ‘um yeah that one’ and not mess it up.

        If only there were a way that delegated legislation could get rubber stamped by the elected people before it got rolled out… oh wait…

      2. Ms. Murchison*

        Right, which is literally insane. The only person who believes this is a good idea is one who doesn’t want any regulations at all. The reason regulation creation is delegated to agencies is because it’s too much work for Congress to do alone and requires niche subject knowledge that Congress does not have.

        1. Unsure about that*

          Respect for niche subject knowledge that ends with useful regulation is arguably on the decline.

          I believe the term is “career bureaucrats” and many want them eliminated.

        2. Ally McBeal*

          “The only person who believes this is a good idea is one who doesn’t want any regulations at all.”

          So, the GOP. They’ve been at this since the Reagan years but it’s really ramped up with their current guy.

        3. Sola Lingua Bona Lingua Mortua Est*

          It’s also ludicrously easy to fix/bypass–OSHA or whomever drafts the regulation and the same congress that appoints them rubber stamps it along with a thousand others in an omnibus vote.

          1. MigraineMonth*

            Except you’d need a functional congress to get it through, even in an omnibus vote. The nice thing about the EPA and OSHA was that traditionally they quietly worked towards their mandate instead of getting whiplashed back and forth by every new administration/political wave.

        4. The Unionizer Bunny*

          The reason regulation creation is delegated to agencies is because it’s too much work for Congress to do alone and requires niche subject knowledge that Congress does not have.

          And because agencies are able to respond faster than Congress to innovations in lawbreaking. The legislature doesn’t want to write laws that specifically ban every known crime with extreme specificity – people can be injured in the years it takes for a dysfunctional Congress to catch up.

    4. NoIWontFixYourComputer*

      It’s due to the Loper Bright decision that threw out the Chevron Doctrine.

      The dust from the stampede of corporate lawyers running to Texas to file suit can be seen for miles and miles and miles.

  9. Tradd*

    What about non-disclosure agreements? I was laid off in March 2020 from a company I’d been for 13+ years. The NDA was shoved in front of my face in 2017, 10 years after I’d started there. It would be valid for two years after I left the company. When I was laid off it was sudden, at the end of the day, and I had no way to say goodbye to anyone. I emailed a customer I dealt with constantly the next day to tell her goodbye and good luck. She emailed the company demanding to know who would be handling her account. That started a bunch of stuff.

    HR emailed me advising that if I contacted anyone else, I would be sued. It seemed way over the top. I wasn’t trying to steal business at a new company, nor was I trying to steal employees. I just wanted to say goodbye to someone I had dealt with nearly daily for 10 years.

    1. Tradd*

      Forgot to mention: I was unemployed at the time so I had no new company to steal any secrets or business for.

    2. Donn*

      Some companies are just that single-minded. I know of a case where Company, based in State A, sued its former employee “Dana” who was based in State B, for violating a non-compete agreement when Dana changed jobs.

      Several clients followed Dana to their new employer, but Dana hadn’t recruited them. The clients chose to follow Dana to the new employer. In any event, State B doesn’t allow non-compete agreements against poaching clients.

      Company insisted on suing despite being told they had no case in State B. I wondered if they would have had a case in State A, and refused to accept that the laws could be different somewhere else.

  10. Sometimes You Just Have to Shrug*

    I signed a non-compete when leaving a toxic work environment. It was so I could eat. I truly didn’t think the things that I had learned while I was at that position was so vital that it would hurt them if revealed. They were the ones paranoid over what I had found out because they consistently lied to their customers on how far along the development of new products were at that time. They might have lost a lot of new clients if that knowledge was out there. However, there are industries, that your knowledge could hurt their business beyond a couple of clients. Think, chemists finding a cure for Covid rather than a vaccine. That’s big dollars, like billions. I don’t think a blanket ban should ever be a thing. I also don’t want one judge deciding for everyone nationwide what is and is not allowed. For me the non-compete saved me while I looked for a new position.

    1. kalli*

      A non-compete and an NDA aren’t exactly the same thing and the one does not preclude the other, severance, in lieu of notice or entitlements.

      1. MigraineMonth*

        Yeah, the big tech companies are based in CA where non-competes are illegal. They will sue you/each other for theft of intellectual property if you run off with the blueprints for the new iPhone, but that’s very different from saying, “If you ever try to leave us, we’ll make sure you can’t work in tech for the next two years.”

    2. TheBunny*

      This would be covered by an NDA. You can go work where you want… you just can’t give them your COVID cure.

  11. Anon for this*

    Ugh, it’s always freakin’ Texas. In light of this, really hoping Alison will answer my question on ethically job hunting under a noncompete!

  12. Romanian philanthropist*

    Oh my god, Texas, shut the heck up already.

    I would honestly pay Texas to *successfully* secede the Union this time, they’re so determined to be *individual* and *special*

    1. NoIWontFixYourComputer*

      But they have to give a permanent lease to the US.gov for NASA JSC, and US (not Texas) law would apply to NASA.

    2. CommanderBanana*

      THANK YOU. I lived in Texas briefly, not by choice, and I would be delighted if Texas just seceded already.

    3. Peanut Hamper*

      Yes, exactly. You want to be independent and go it alone? THEN ACTUALLY GO IT ALONE!

      Also, can El Paso and Austin be the modern equivalent of West Berlin in this case? Those are pretty cool places.

    4. Barnes and Noble Bridge Burner*

      Ugh please no. I live in TX, and for multiple reasons, leaving is not viable for me and most of my family. Please take our legislators though!

      1. EO*

        Seconded! Look at an electoral map of Texas and you’ll understand why our politicians are so awful. it’s not our fault.

  13. Lisa*

    Alison, Minnesota also bans non-competes now regardless of hourly/salary level as of last July. They did not strike down old existing contracts but new ones cannot be signed.

  14. CommanderBanana*

    It’s so weird, it’s almost like who you vote for matters in ways that go waaaaay beyond just becoming president!

  15. Funemployed*

    So my brother-in-law is pissed because this affects his ability to seek out job opportunities with a better work-life balance (engineer).

    On the other hand, my best friend (and other friends) are finance bros and non-competes are literally there only vacations. You grind 80 hour weeks, get poached by another financial institution, and they pay you while you wait out your non-compete.

  16. Hroethvitnir*

    My sympathies. As a non-American I was very jealous of this law – and I hope it happens!

    As an ex-vet nurse we had non-competes. Which is insane, because what other job are we going to do? It’s just part and parcel of how we were poorly paid, inappropriately salaried, and generally treated poorly. :)

    I do know in Aotearoa they’re pretty much unenforceable, so I generally don’t take them seriously, but I do resent them. (I’ve changed industries… to one not wildly better, lolsob.)

  17. Tiredofit all*

    Blame Texas all you want, but any state can pass a law making non-competes unenforceable. NY had one that the governor would not sign.

      1. Kevin Sours*

        By quite a while ago you mean 1941 by statute with an information prohibition going back far longer.

        1. TheBunny*

          I knew it was mid 20th Century. I was too lazy to Google as I was already not working while commenting LOL and felt confident “quite a while ago” would cover it as we’re pretty well known for not having them. :)

    2. Peanut Hamper*

      The problem is that not every state has the political will power to do so. Texas has a lot to own up to in these cases.

  18. Random Name*

    Non-competes are already banned in California, North Dakota, and Oklahoma, and 11 more states and Washington, D.C. prohibit them for hourly wage workers or workers below a salary threshold.

    Does someone have a link of which states have what protections?

  19. Jay*

    Funny story.
    Judicial Review is not actually a law.
    Seriously.
    Not at all.
    It’s just something that judges decided for themselves that they were allowed to do.
    That’s it.
    It has no validity whatsoever under our form of government.
    And it’s about damn time we reminded our judges of this fact.

  20. Adardame*

    I had to sign a non-compete for my current job. I’m not supposed to take a similar job for two years in any state in which my employer operates even if I’m let go involuntarily.

    I asked my manager about it afterward, and he wasn’t familiar with the non-compete details. Apparently it’s never enforced, and people from this company switch to similar positions at other companies all the time without issues.

  21. East Coast Commenter*

    I honestly support the policy rationale behind the FTC rule but every admin lawyer/prof will tell you that rule was basically DOA. Nondelegation doctrine, major questions doctrine, arbitrary and capricious standard; the FTC did itself no favors drafting one of the broadest non-compete bans in the country (even California arguably provides for more carve-outs). Even before the Supreme Court overturned Chevron and made my admin law class obsolete, we all suspected it would get overturned, if not at the district level then definitely by a circuit court/SCOTUS.

  22. apologies*

    One warning re apologizing – I made an effort to cross a racial divide and got warnings from my supervisor, both the initial time and the later apology attempt. I’d have been better off not saying anything.

  23. Coder von Frankenstein*

    Texas? Five bucks says the judge was Kacsmaryk.

    *checks article*

    Huh, I have lost five bucks to myself. It wasn’t him. I guess that means there might be some actual legal basis for the ruling, and we can’t just assume it will be overturned as soon as a higher court gets its hands on it. Drat.

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