Employee Survival Guide® - The End of Noncompete Agreements Nationally

Starting point is 00:00:00 Hey, it's Mark here, and welcome to the next edition of the Employee Survival Guide, where we tell you what your employer does not want you to know about and more. Today we're talking about the end of the non-compete agreement nationally. If you have a non-compete agreement or are about to be handed one, the following information is very important. The collective quote-unquote you here covers an estimated 40 to 60 million employees nationwide, from executives to low-wage workers in the service economy. The epidemic use of non-compete agreements has gotten out of control, and too many employees have needlessly and financially suffered under the onerous default management practice.

Starting point is 00:00:38 The end of this BS employment practice has now arrived. Non-compete agreements were created by employers for employers. Employees never had a chance to negotiate these agreements. We have written extensively about this topic on our website. Non-compete agreements serve no valid or reasonable purpose to protect the interests of employees, only employers. Non-compete agreements are an overreach by employers, whose interests are already protected by confidentiality and proprietary information agreements. Employees say it further protects their competitive advantages, trade secrets, and other corporate proprietary information. That is a lie, told over and over again by the pro-employer lobby groups and the defense bar that support them.

Starting point is 00:01:22 Employees are now restricted from gainful employment more than any time in this country's work history to their financial detriment. Meanwhile, employers reap billions of dollars in unlawful restrictive trade practices that are ruining our economy, just when we are trying to dig out from this pandemic. Shame on you, employers. How did employers cause this calamity? The facts are simple to understand. No one noticed the widespread use of this default employment practice. No one noticed the financial cost to employees.

Starting point is 00:01:55 Employees are not organized, and politicians sought only to align themselves with the business lobbies such as the Chamber of Commerce or the Society of Human Resource Management. with the business lobbies such as the Chamber of Commerce or the Society of Human Resource Management. It is exactly this decentralized and unorganized nature of non-unionized employees, roughly 150 million strong, that employers across the spectrum abuse and mistreat with non-compete agreements. How certain am I of this fact? Well, I watched endless flow of non-compete cases come through our offices. In every case we have litigated, the employee never negotiated the non-compete agreement, had no say in the matter, was told to sign it or lose the job opportunity after they were already hired.

Starting point is 00:02:39 These default employment practices have to stop. They are abusive and restrict trade in the U.S. economy. This is not a political issue, and neither party can claim it as a weapon. Companies large and small, run or owned by members from both parties, use non-compete agreements. Employers who force non-compete agreements on employees derive the same financial benefit, profits, at the enormous expense to individual employees. The Federal Trade Commission has finally weighed in. According to the Federal Trade Commission website,

Starting point is 00:03:10 on January 9, 2020, the Federal Trade Commission held a public workshop to examine whether there was a sufficient legal basis and empirical economic support to promulgate a commission rule that would restrict the use of non-compete clauses in the employee-employer relationship. Proponents of the ban on non-compete agreements seek to create a rule that non-compete agreements in the workplace are an unfair method of competition under Section 5A of the Federal Trade Commission Act. Obviously, litigation will ensue right up to the Supreme Court, most likely on federalism grounds, where opponents of the ban will argue states have a right to make and enforce their individual state laws versus the federal government doing so. President Biden issues a comprehensive executive order banning non-compete agreements. On July 9, 2021, President Biden issued a comprehensive executive order that stated an important part, quote, consolidation has

Starting point is 00:03:56 increased the power of corporate employers, making it harder for workers to bargain for higher wages and better work conditions. Powerful companies require workers to sign non-compete agreements that restrict their ability to change jobs. To address agreements that may unduly limit workers' ability to change jobs, the chair of the FTC is encouraged to consider working with the rest of the Commission to exercise the FTC's statutory rulemaking authority under the Federal Trade Commission Act to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility, end quote. To be abundantly clear, this is not a political issue or socialistic propaganda by the Biden

Starting point is 00:04:37 administration, but a return to fairness and placing a premium on competitive workforce. As a political historian, employment activist, Republican, and employment litigator on the employee side, I professionally watched the nonsensical enforcement of unfair and dubious non-compete agreements for 25 years. Simply, enough is enough already. The pendulum is now swinging back to center. According to an accompanying fact sheet published by the Biden administration, quote, competition in labor markets empowers workers to demand higher wages and greater dignity and respect in the workplace. One way companies stifle competition is with non-compete clauses.

Starting point is 00:05:14 Roughly half of the private sector businesses require at least some employees to enter non-compete agreements, affecting some 36 to 60 million workers, end quote. The end of the abusive default management practices is here. The above executive order banning non-compete agreements marks the beginning of the end of abusive management practices that has enveloped the nation's workforce since the founding of this country. Other onerous default management practices such as forced arbitration, forced confidentiality of settlements, lack of employee privacy, lack of freedom of speech at work in the private sector, and the implement-at-will rule itself all strip employees of basic civil rights and negotiation power, and in some instances

Starting point is 00:05:54 promotes discrimination. Employees are indispensable to the operations and profitability of all companies. Think of Amazon and their warehouses in your local neighborhood. Without line workers, how will your prime delivery get to you when you press the buy now button on the website? Employers dehumanize employees down to their human capital quotient for capitalism purposes. We should all be mindful not to break the collective backs of our nation's workforce and begin to recognize them for what they really mean to our economy as a whole. We need to bring

Starting point is 00:06:23 more fairness and transparency to the workplace. If you'd like more information about this topic, please contact our employment attorneys at Cary & Associates PC or email at info at capclaw.com. Thank you and be well. Have a great week.

Employee Survival Guide® - The End of Noncompete Agreements Nationally

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