Monday, April 29, 2024

Non-compete agreements disputed

Most projects apply non-compete agreements when key project people leave with competitive-sensitive and proprietary information that could help the competition.
The U.S. Federal Trade Commission has issued a rule to prohibit such agreements.
The U.S. Chamber of Commerce has sued to have the rule nullified.

The two sides seem to see it this way (as reported in the WSJ)
  • The Chamber’s lawsuit says policymakers and courts have for decades recognized the value of noncompete agreements, and the federal government has never regulated them. 
  • An FTC spokesman defended its authority to issue the measure. The agency argues that noncompete clauses hamper competition for labor and result in lower pay and benefits for workers.
It will take a long time for this to wind its way through the legal system.

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