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January 23, 2023 at 03:20 PM
The Federal Trade Commission has proposed a new rule that would ban the use of non-compete agreements between employers and workers. The rule has gained attention because the term “worker” would be defined to include all employees, independent contractors, interns and others who perform services for a business. The rule would ban both new and existing non-compete agreements.
Any type of agreement that has the effect of preventing an individual from seeking or accepting employment with another person or business after concluding employment with the employer is covered by the proposed ban. The FTC has based the rule on a finding that non-compete agreements are a form of unfair competition that violates Section 5 of the Federal Trade Commission Act.
We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about the FTC’s proposed ban on non-compete agreements.
Below is a summary of the debate that ensued between the two professors.
Their Votes:
Bloink
Byrnes
Their Reasons:
Bloink: We need this type of limitation on the use of non-compete agreements for many different reasons. Non-compete agreements put employees at a disadvantage because the employer is often the party with the most leverage. Employees often have no choice but to accept the terms of the non-compete in order to gain employment — something that can create a significant disadvantage going forward in the employee’s future career endeavors.
