And companies kept using them anyway, because how many employees know it’s unenforceable, or would be able to fight a much larger company trying to enforce it?
Yeah…the wording of ‘nearly all’ non competes being voided worries me as well. I wonder if we’ll just see corporations weasel a way around this to keep using them
Also looks like the two conservative chairs voted against the rule lmao, shocking
Ed, I did find this in the finalized rule under part E, Sect 1 , ‘Generally’
For example, the Act exempts “banks” and “persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act.” And the Act excludes from its definition of “corporation” any entity that is not “organized to carry on business for its own profit or that of its members.” The NPRM explained that, where an employer is exempt from coverage under the FTC Act, the employer would not be subject to the rule. The NPRM also explained that State and local government entities—as well as some private entities—may not be subject to the rule when engaging in activity protected by the State action doctrine.
So probably just certain contractors/researchers could still be bound by NDAs under this ruling, likely ones for government work (as mentioned below)
Generally, I’m thinking of the scientists and engineers that do the researching and designing, where it’s not just that the company doesn’t want them to blab about their internal secrets, but the government also doesn’t want them using that knowledge for a foreign competitor.
I was thinking less along the lines of being outright nullified by definition, and more them not passing the basic tests, but that’s good to know. Looks like a lot of other states also already had conditions outlining their use (at the bottom of that link)
This is good, but iirc I seem to recall being told in business law years back that most non competes were unenforceable in court
Still, I suppose that’s 1 point for this admin, 533,256 against
And companies kept using them anyway, because how many employees know it’s unenforceable, or would be able to fight a much larger company trying to enforce it?
I’m expecting more of the same here.
Yeah…the wording of ‘nearly all’ non competes being voided worries me as well. I wonder if we’ll just see corporations weasel a way around this to keep using them
From the official FTC release it looks like existing NCAs for senior executives are still enforceable but new ones can’t be written.
Really curious if this ruling applies to public employers as well as private.
I finally got curious and went digging, looks like public and private; at least, I don’t see anything distinguishing between the two in either this text or the proposed rule
Also looks like the two conservative chairs voted against the rule lmao, shocking
Ed, I did find this in the finalized rule under part E, Sect 1 , ‘Generally’
So probably just certain contractors/researchers could still be bound by NDAs under this ruling, likely ones for government work (as mentioned below)
I suspect it’s an exception for matters of national security, ie the MIC.
Wouldn’t that typically be an NDA, not a non-compete?
Generally, I’m thinking of the scientists and engineers that do the researching and designing, where it’s not just that the company doesn’t want them to blab about their internal secrets, but the government also doesn’t want them using that knowledge for a foreign competitor.
That’s a fair point
They’ve been unenforceable in California and New York for several years now, but I think in other states they were still valid.
I was thinking less along the lines of being outright nullified by definition, and more them not passing the basic tests, but that’s good to know. Looks like a lot of other states also already had conditions outlining their use (at the bottom of that link)