A government study and independent research groups determined that worker non-compete agreements, which are contracts which prevent a worker from working for another employer within the same industry, are hurting the US economy by keeping wages low, suppressing the implementation of new ideas and innovation which would invigorate the economy, and preventing new business formations. They determined that when employers require non-compete agreements in order for a person to be hired or to remain in their current employment position, they are presenting workers with a Hobson’s choice. Non-competes take away the fundamental freedom of workers to improve their life by changing jobs to work for other employers or by starting their own businesses. Non-competes are a growing trend in all industries and affect workers of all colors, race, sex and age.
Advocates for employee rights had their hopes dashed when a federal judge in Texas in August 2024, struck down a Biden administrations’ ban on worker non-compete agreements. The ban, if allowed by the courts, will invalidate non-compete agreements affecting most US workers. The ban was to take effect nationwide in September 2024, but due to a conflict in different courts in different states, the issue of the ban in different states and courts will predictably wind its way through the courts and end up before the US Supreme Court.
The government Agency, the Federal Trade Commission, which issues rules affecting trade, business, the US economy and commerce, seeks to ban non-competes for almost all U.S. workers. You may read the full final Federal Trade Commission rule banning non-compete agreements here. https://www.ftc.gov/system/files/ftc_gov/pdf/noncompete-rule.pdf
This rule is in agreement with governmental studies and statistics from other independent research groups, which predicted based on the data, that there would be a growth of new businesses by up to 2.7% per year and a minimum of 8,500 new startup companies which would be created per year after non-competes become banned.
Non-competes keep wages artificially low because companies do not have incentives to give raises when their workers are contractually prohibited from accepting a new employment position with a different employer who offers them more money. A ban on non-competes will allow workers to seek out new and better employment opportunities within the same occupation without fear of legal repercussions from their current employer. The Federal Trade Commission based on their research projected the ban would result in higher earnings for workers in many industries. They projected that the ban’s incentivized competition would additionally lower health care costs of up to $194 billion over the next ten years. The Federal Trade Commission determined that if workers would be free to leave their current place of employment to embark on their own new startups, it would be a driving force invigorating the US economy, leading to an estimated increase of up to 29,000 more patents each year for the next 10 years under the implementation of the final rule on the ban.
Don’t Sit on Your Rights
I am an aggressive and compassionate employment law attorney who is experienced and successful in representing persons of color, women, older workers, disabled employees, LGBTQ executives, and in obtaining monetary compensation for their being subjected to harassment and discrimination. I have successfully represented employees who were either terminated or pressured into resigning because of the discrimination against them.
If you are being subjected to such unlawful workplace discrimination or believe you are being pushed out of your job, contact Hope A. Lang, Attorney at Law today for a free consultation. I accept discrimination and whistleblower cases from all over New Jersey and have locations in Southern, Central and Northern NJ to meet with clients.
Hope A. Lang, Attorney at Law represents workers throughout the entire state, including Hackensack, Jersey City, Newark, Irvington, Orange, East Orange, Trenton, Paterson, Montclair, Elizabeth, North Brunswick, Cherry Hill, Vineland, Union, Plainfield, Hamilton Township, Lakewood, Edison, Parsippany-Troy Hills, Franklin, Lakewood, and every NJ County, including Bergen, Hudson, Middlesex, Essex, Monmouth, Somerset, Ocean, Union, Camden, Passaic, Morris, Gloucester, Atlantic, Burlington, Camden Counties.