The FTC banned noncompete agreements last week. (FYI: a noncompete is a contract that keeps employees from joining rival companies.) The next day, the Chamber of Commerce and biz groups repping AmExAXP $238.92 (1.43%), JPMorganJPM $193.35 (-0.10%), WalmartWMT $60.17 (0.12%), and other corporations sued to block the rule. At stake: the FTC’s rule could cancel 30M noncompetes four months from now, though bankers and some senior execs would be exempt. The FTC says the contracts stifle wage growth by preventing job-hopping — and banning them could lift workers’ earnings by $400B+ over the next decade.
Pinky swear: Businesses argue noncompetes protect their intellectual property, trade secrets, hot-sauce recipes… basically anything confidential that gives them an edge.
50-nifty: A handful of states including California already don’t enforce the contracts. A ban in New York (Wall Street’s known for its noncompetes) passed but was vetoed.
Source: Sherwood.News