I truly hope the FTC bans these noncompete labor contracts.

I understand the concern that some types of businesses have, where they don't want an agent to move to another company and take a bunch of the existing clients with them, but that specific behavior can be banned via a contract and still allow for an employee to work where they want.

I always thought it was silly that after signing one of those contracts, you could be sued for simply being employed.

To me it always seemed like a way to try to "lock employees into a bad agreement" more than anything else.

https://www.nytimes.com/2023/01/05/business/economy/ftc-noncompete.html

Here, we have this for tertiary sector / services contractors, but employees have more priviledges and rights.

/e sometimes this clause is justified.

This post was edited by Meanwhile on Jan 5 2023 12:54pm

The noncompete agreement in my employment contract drastically changed my life. It basically eliminated all hopes of going out on my own an the area in which the non-compete was supposedly valid was massive, were talking 1 province and two territories here in Canada. While I don't think it necessarily would have stood in court, i didn't have the funds to go into a multi-year legal battle. To go into business in that area Id have to pay the first two years REVENUE (not net) from all clients in those regions.

I have no doubts they would have followed though either, it was all hunky dory with them until I said i'm leaving and not going to be a Partner here with you. True colours came out rapidly after that.


Also frankly the idea of pouching clients or employees is total bullshit. If an employee is willing to quit, its not because they got picked off, its because they're unhappy or could do better elsewhere. Same with clients leaving whos currently serving them. They wouldn't leave if they were happy.

Companies need to look inward as to why they're not retaining employees rather than using non-competes to try to eliminate any future competition so they can continue to halfass provide services to their client base.

I took so many passive aggressive threats on the way out. "Be careful what you do next"or "Wouldn't want to see you get into trouble"

This post was edited by SBD on Jan 5 2023 12:59pm

I don't know the CA legal system well, but that sounds like robbery to me. 2 years of revenue? ...

Sorry I was typing too quickly, 50% of revenue for the first 2 years.

That's still ridiculous... The average net profit margin is like 7-10% and I don't see why they should have any legal basis to the claim that they are owed a percentage of revenue anyways.

I'm still confused how an employment contract can be valid at all once it has been terminated...

Edit - NVM

This post was edited by SBD on Jan 5 2023 01:09pm

I was going to say there was something in there you might want to remove.

I got clued in pretty well about the industry/vertical.

This post was edited by mki on Jan 5 2023 01:15pm

The other issue being you need to maintain hours in the profession, and if you don't have those hours for two years you can no longer create your own practice, that's why they use that two year mark, knowing it's a pain to be able to get back into a state where you can practice again without actually being employed. You end up having to do a ton of professional development or contract elsewhere to pick up the needed hours again.

This post was edited by SBD on Jan 5 2023 01:18pm

It sounds like a chicken and the egg type of problem. It must be very frustrating to deal with something like that...