A recent decision from the U.S. Federal Trade Commission will likely change the landscape of worker/employer relationships as we know it.
On April 23 the commission approved a rule to block the enforcement of non-compete agreements typically used by employers to prevent employees from working with competitors or starting similar businesses. The move was motivated by some Commission members’ aim to prevent wage suppression and other abuses.
In a 3-2 to approve the measure during a public meeting, the decision immediately drew staunchly polarizing responses.
“This decision sets a dangerous precedent for government micromanagement of business and can harm employers, workers, and our economy,” said Suzanne Clark, who is the President and CEO of The U.S. Chamber of Commerce, according to Reuters.
Georgia-based attorney Ryan Williams, esq. agrees.
“I do believe it’s going to have a very strong impact on employers and who they employ,” Williams tells ESSENCE. “The focus will shift even more to getting employees that show the potential of longevity versus someone who may be more fly-by-night. He explains that job hopping has become increasingly more common, particularly among younger high-credentialed prospective employees.
“Employers might not want to take a chance on someone who, after receiving training, goes to their competitor or sets up their own shop,” Williams says.
He also says the non-compete ban poses the risk of adversely affecting hiring rates over time.
“Unfortunately, people are going to be more shy about their hiring process—people who are bit more flexible with their expectations because they’re just seeking something stable. On one end, you’ll probably see the increase of single mothers, single fathers, people who aren’t going to move around get hired more than college students who are fresh out of college or professional degree program. They’re going to find a harder time getting a job because nobody’s going to want to train them. I want you to come in already trained now because I know whatever you learn from me, you can take it and either build right beside me.”
Conversely, government officials say the ban is a move to protect vulnerable workers from being further taken advantage, and ultimately a major step in strengthening employee rights.
FTC Chair Lina Khan during the meeting said noncompetes not only restrict workers’ opportunities but can infringe on other fundamental rights by blocking them from changing jobs.
“Robbing people of their economic liberty also robs them of all sorts of other freedoms, chilling speech, infringing on their religious practice, and impeding people’s right to organize,” FTC Chair Lina Khan during a recent meeting, explaining that noncompetes limit workers’ income generating opportunities by by preventing them from taking on specific jobs.
Williams thinks the ban of noncompete will just usher “in a kind of abuse” for employees.
“Now, we’re likely too see more strict non-disclosure agreements that will ultimately prevent employees from sharing any inside information about their former employer at their new jobs or businesses they start,” Williams says. “Either way, the power will still be in the hands of the employer.”