Senator Marco Rubio introduced the Freedom to Compete Act, which would amend the Fair Labor Standards Act to forbid the enforcement of or entering into of non-compete agreements for employees who are not exempt from the Act’s minimum wage and overtime provisions. This goes into an issue I’ve been long concerned with because I think that, in very many cases, non-compete agreements are used without legitimate business reasons other than to restrict competition. I’m inclined to be very supportive of this bill.
My immediate impression is that it doesn’t go nearly far enough.
It applies only to Hourly workers, and therefore won’t apply to managers. It also won’t apply to white collar workers (Why white collar any more? I wear blue jeans and a t-shirt to work these days). There is significant abuse of non-compete agreements at all levels in the work place.
I suspect that this is an effort to burnish some right-wing populist cred without actually accomplishing anything that will cost their donors anything.
I think that the growing use of non-compete agreements, especially for fairly low-level workers, has become little more than an attempt by some companies to make it harder for their employees to move jobs.
I understand non-compete clauses for employees who make extensive original intellectual or developmental input into a product, or who are high up in the executive chain. You don’t want one of your design engineers or key managers quitting in the middle of a project and going over to a competitor. But enforcing that sort of thing on regular, non-exempt line employees is, in many cases, complete bullshit.
And, like Tatterdemalion, I’d actually suggest that it should go further. Especially if you clearly disconnect non-compete clauses from the issue of corporate espionage and intellectual property rights. That is, people should be allowed to move between companies, but there should still be mechanisms in place to prevent them from taking company secrets with them to their new employers.
Did I say it should? Notice that I specifically used the word “quitting” in my post. Do you need me to explain the difference between “quitting” and “fired or laid off” to you?
Why do some people feel the need to grasp at a straw-man hypothetical, and turn it into some sort of veiled accusation? Nowhere in my post did I suggest that those few sentences should constitute the sum total of all efforts to address the issue of non-compete clauses. In fact, a much more reasonable inference would be that, given my arguments in favor of the employee, I would be very likely to support an employee in a case where he or she had been terminated by the company.
Happy now? Next time, try not to put words in my mouth.
I once applied for a job making gelato. The owner wanted me to sign a non-compete. It was not enforceable in my state, so I could have signed it anyway. In the end I decided he was too much of an asshole and didn’t take the job.
To play devil’s advocate, because that employee (who desired to quit but would not because of the clause) could then be a complete ass, showing up drunk to the job, sexually harassing other employees and such things, and then, because the employer fired him, he would be free from his non-compete clause.
It’s a good idea, but there should be more protections for exempt employees as well, such as the new Massachusetts law that requires employers to continue paying former employees at least 50% of their salary for the duration of the agreement.
Hi. Little Marco is one of my two senators. We get very nervous down here when Little Marco starts thinking. When he actually puts something down on paper, we panic. You can bet anything Marco proposes is designed, at the heart of it, to enrich the people whose hinies he’s sworn to kiss - the ones who make those donations. The “people”? That’s a concept with which he is totally unfamiliar. If you want to know the extent of Marco’s grasp on reality, remember him trying to duck out of camera view to sneak a sip of water - and that normal speakers will have a glass of water right there with them on the podium. :smack:
You know we have a pretty good model for how to avoid that problem- unemployment insurance. You’re not eligible if you quit your job ( except under specific circumstances where the employer did their version of what you describe and effectively forced you to quit) and in most states, you will be eligible if you are simply not a good fit for the job or if there is a lack of work or even if you are incompetent- but will not be eligible if you were fired for misconduct such as not showing up, stealing or sexually harassing other employees.
“Well, in order to avoid the non-compete agreement, I started showing up for work drunk, sexually harassed other employees, and was generally a complete ass. That way, I could use the ‘fired’ loophole in the Little Marco law.”
I agree that it doesn’t go far enough , but I disagree that it will do no good. It will keep McDonald’s/Wendy’s etc, workers from being prohibited from working at another fast-food restaurant - but the no-poaching agreements need to go, too. Those prohibit one McDonald’s franchisee from hiring employees of another franchisee.
One can be salaried yet still non-exempt. Not that this affects your point.
I’m leery of the government interfering with employment agreement, but non-compete clauses make the job market less efficient. I’ve read arguments that CA making them unenforceable boosted tech industries that didn’t grow elsewhere. This law of course wouldn’t apply to most of those people. I’ve not thoroughly evaluated any of those arguments (and don’t even have a cite on hand) but it doesn’t strike me as ridiculous.
It may serve as a starting point, that could be extended later, if the political winds keep shifting in a good direction. I just am skeptical, like Pithily Effusive, of little Marcos motives.
It sounds like a good idea in principle, but the devil is in the details, and I for one don’t have time to exorcise all of the fine print in a law. There are some situations where non-compete agreements make sense, and some where they don’t. Does this law cover all of the situations where they don’t make sense? Does it leave intact all of the situations where they do? And of course, this being a federal law adds extra wrinkles: Does it only apply to employment which can be construed as interstate commerce? Is it structured as an incentive for states to pass laws, like the drinking age laws? How does it interact with already-existing state laws?
It’s an amendment to FLSA , which covers entities engaged in interstate commerce. If the entity has more than $500K in sales, all employees are covered -“enterprise coverage”. Some employers are are automatically covered as an enterprise , such as government agencies, hospitals, nursing homes, no matter how big or small. Even companies that are not covered as an enterprise may have employees who are covered based on their individual jobs - sending or receiving mail/phone calls/emails from out of state vendors/customers has been enough for courts to determine that employees were engaged in interstate commerce. Basically nearly every business except small, very local ones will have at least some covered employees- for example, if I hire a contractor to renovate my house, he buys all his materials at a store in my state and he doesn’t accept any out-of state jobs, he will not be covered by FLSA . But if the store where he buys supplies has any out-of-state suppliers or customer, they will be covered by FLSA.
If you first take into account that Rubio is a traditional Republican, meaning he’s the lapdog of corporate interests and that he never does anything of his own volition (only what his masters require of him) then you can safely assume if he’s presented a law complicating the notion of interstate commerce, attaching to it a feel-good name such as Freedom to Compete, it is only in the interest of removing restrictions from companies already “penalized” by federal laws on the books requiring of them something they do not wish to do - salaries, fees and taxes in particular. When the definition of interstate commerce is redrawn, then all the laws having to do with this federal jurisdiction will be redrawn along with it. Whenever you see Marco “legislating” that’s the rock you should turn over to see what comes scattering out.
EDIT: If Marco actually *wrote *the law I have a bridge in San Francisco I’ll give you. It’s orange.
Because you don’t want the government interfering with freely negotiated private contracts, right? A common libertarian position.
Except…employment agreements…software license agreements…mortgage agreements…you know what they all have in common?
In practice individuals have zero negotiating leverage. They aren’t agreements, they are one party taking every thing they can possibly get out of a deal, and the other party has a hobsian choice to either sign or not sign. The *only *reason they don’t have unconscionable terms (for example, a mortage lender declaring they can take your house and all your equity if you are late on a payment more than 10 days once) is because the government bans those terms. That’s it.
Do you think a fast food worker “freely agreed” to only work for that particular chain when they signed the agreement? No, they needed a job and they had no other choice. Also they probably didn’t read the agreement since legally they can be as long and difficult to read as the contract drafter decides them to be, with no penalty to the drafter.
The above sounds nice but I’ve negotiated the terms of every job I’ve held since college and have had clauses I don’t like removed from other contracts. E.g. a lease. Never a mortgage, having never used one, but the banks know they’re competing for my business. So come back when you have some data.