The Federal Trade Commission took action to prohibit employment contracts that stop employees from working for rivals. Then it was immediately sued by the son of a famous Supreme Court Justice.
YESSS!!! I know it's not over yet, but this is a great step forward, and I have no doubt that Matt helped make it happen, as did we, his subscribers. Great work all!
Thanks Matt for the work you have done to help get this indentured servitude requirement turn over. Workers will now be free to decide what is best for them and their families and not what is best for corporations that only care about profits for themselves and their shareholders. Contrary to what the useless Milton Friedman said, generating profits for shareholders is not the prime directive of corporations. Employees produce the products of corporations, and they are the consumers that buy these products. Accordingly, they deserve the power to organize and to earn a fair share of the profits of their production.
The legal filings by Scalia are so incredibly shoddy that I’m shocked that he would even go ahead with filing lawsuit as is. It is so nakedly a hack job that it calls into question his ability to be a lawyer.
It’ll be interesting to see how this goes down politically, especially the current weird alignment in terms of the political parties and business
If lawmaking authority was specifically delegated to a federal agency by Congress, as it appears it was here, the novel judicial theory called the “Major Questions Doctrine” is moot. The ultraconservative Trump appointed SCOTUS has used this ridiculous judicial theory in several important cases in their quest to dismantle the administrative state.
Great day for a competitive American economy. It’s competition that promotes innovation and creates jobs. The economy we have now, is really good at making wealthy people wealthier. What’s needed instead is one that works for all of us.
Eliminating non-competes will help. So will enforcing our antitrust laws and breaking up the monopolies that dominate so many sectors. Biden is doing all of these things. Four more years of him and we’ll have a much stronger economy that works for all of us.
I live in New Hampshire. I recently had a conversation with my hair stylist. She told me that ALL the products they use to provide their salon services went up in price. The price hike was to such a degree that they had to raise their rates for services. The rate increase meant that some clients were priced out. One example she provided was foils that used to cost $10 per box, now are over $25 per box.
My immediate thought was price fixing.
Her takeaway is that both political parties are bad, and none are looking out for business owners.
I conducted a google search when I got home and was disturbed by the results. Almost all the results were from 2022 and they were helpful hints on how beauty solons can explain raising their rates to their clients. I found nothing addressing the underlying reason.
Any information you can provide on how these products suddenly went up in price affecting an entire service industry would be helpful.
Matt, have you ever looked into the studies on corporate directorship interlocks? They are global and seem dangerous for a "free society". Here is an article about Sen. Let Metcalf's study from 1977/78.
I know your team is incredibly thorough but I thought I'd add my two cents. Having seen indentured servitude in tech and in the research space for other reasons.
Non-competes are a fundamental distortion to the 'market' of wages. So, at the sake of sounding like a cassandra, big business should not oppose it. We are not serfs. Its the ebb and flow of both sides of the economic spectrum that brings out natural balances. Corrupt, inefficient business fail, as does big business without bailouts, excellence should be rewarded, otherwise while there is the personal commitment to perform to one's highest ability, outperforming your cohort (I love the word cohort!) deserves compensation. What, Scalia describes is a negative incentive structure that I would imagine reduces productivity.
As far as the the consumer side argument. A fundamental societal shift in the thinking of society and the way society is organized is a fundamental right of a free society. Particularly if consensus can be reached. The precedent argument is tougher to negate in my eyes. But arguably if corruption or flawed thinking is perpetuated through time. Does that make it fair/just, or in line with the constitution? Again a flawed argument. Communication and shared information is so much more rapid in the last 20 years. That falls into Scalia's third point as well. At lastly I suspect that kicking the can to congress is a stall, in the hopes that nothing will get done. A smart tactic objectively.
Full disclosure. Whenever I post one of these links, I expect no one to read them but I try and read them through a couple of times myself. I skimmed the oecd pdf because it's hella long.
Yawn. Non-competes are unenforceable 99% of the time. I’m sorry for the people who have been intimidated by HR and didn’t ask a lawyer. The 1% of the time they are enforceable, they are a hurdle to the Venture Capital industry, who clearly paid for the graphic in the article promising a boom in innovation.
Maybe the best thing is to not work where a non-compete is required for personal employment. You are subjecting yourself to an opressive employer
Employers using contractors to do projects within a time frame should consider protecting their entities with non-compete agreements. Entities that do research, manufacturing, and develop unique methods should be allowed to have non-disclosures with employees. Otherwise there is no reason to do research, develop new products and new methods if your employees could sell proprietary knowledge to potential competition.
Here’s an idea. TikTok US management sets an example for a better way: finance a new US employee owned company to buy it from Byte Dance, with 51% controlling interest. The rest is publically traded.
My thinking is that the employees will be motivated (without a non-compete or NDA) to not compete or disclose because they personally benefit from protecting the IP, even when they leave the company.
If they choose to sell their interest when they leave, only then a limited NDA or non-compete may be appropriate to protect fellow employee owners.
One of the major reasons I was hoping for this rule was to regulate hospitals, but my impression is that FTC rules don't cover non-profits (which many hospitals are poorly classified as). Am I mistaken? What can be done for all the doctors who are boxed in by local monopolies if not?
YESSS!!! I know it's not over yet, but this is a great step forward, and I have no doubt that Matt helped make it happen, as did we, his subscribers. Great work all!
Thanks Matt for the work you have done to help get this indentured servitude requirement turn over. Workers will now be free to decide what is best for them and their families and not what is best for corporations that only care about profits for themselves and their shareholders. Contrary to what the useless Milton Friedman said, generating profits for shareholders is not the prime directive of corporations. Employees produce the products of corporations, and they are the consumers that buy these products. Accordingly, they deserve the power to organize and to earn a fair share of the profits of their production.
The legal filings by Scalia are so incredibly shoddy that I’m shocked that he would even go ahead with filing lawsuit as is. It is so nakedly a hack job that it calls into question his ability to be a lawyer.
It’ll be interesting to see how this goes down politically, especially the current weird alignment in terms of the political parties and business
Nobody hate the free market more than America's oligarchy.
For them, "free market" means that they are free to buy politicians.
It’s a win that plays out well with voters and that’s important in the fight to rein in monopolistic capitalism.
If lawmaking authority was specifically delegated to a federal agency by Congress, as it appears it was here, the novel judicial theory called the “Major Questions Doctrine” is moot. The ultraconservative Trump appointed SCOTUS has used this ridiculous judicial theory in several important cases in their quest to dismantle the administrative state.
Great day for a competitive American economy. It’s competition that promotes innovation and creates jobs. The economy we have now, is really good at making wealthy people wealthier. What’s needed instead is one that works for all of us.
Eliminating non-competes will help. So will enforcing our antitrust laws and breaking up the monopolies that dominate so many sectors. Biden is doing all of these things. Four more years of him and we’ll have a much stronger economy that works for all of us.
Hello,
I live in New Hampshire. I recently had a conversation with my hair stylist. She told me that ALL the products they use to provide their salon services went up in price. The price hike was to such a degree that they had to raise their rates for services. The rate increase meant that some clients were priced out. One example she provided was foils that used to cost $10 per box, now are over $25 per box.
My immediate thought was price fixing.
Her takeaway is that both political parties are bad, and none are looking out for business owners.
I conducted a google search when I got home and was disturbed by the results. Almost all the results were from 2022 and they were helpful hints on how beauty solons can explain raising their rates to their clients. I found nothing addressing the underlying reason.
Any information you can provide on how these products suddenly went up in price affecting an entire service industry would be helpful.
Thank you.
Matt, have you ever looked into the studies on corporate directorship interlocks? They are global and seem dangerous for a "free society". Here is an article about Sen. Let Metcalf's study from 1977/78.
https://www.nytimes.com/1978/04/23/archives/washington-report-interlocking-directorates-flourish.html
I know your team is incredibly thorough but I thought I'd add my two cents. Having seen indentured servitude in tech and in the research space for other reasons.
Non-competes are a fundamental distortion to the 'market' of wages. So, at the sake of sounding like a cassandra, big business should not oppose it. We are not serfs. Its the ebb and flow of both sides of the economic spectrum that brings out natural balances. Corrupt, inefficient business fail, as does big business without bailouts, excellence should be rewarded, otherwise while there is the personal commitment to perform to one's highest ability, outperforming your cohort (I love the word cohort!) deserves compensation. What, Scalia describes is a negative incentive structure that I would imagine reduces productivity.
As far as the the consumer side argument. A fundamental societal shift in the thinking of society and the way society is organized is a fundamental right of a free society. Particularly if consensus can be reached. The precedent argument is tougher to negate in my eyes. But arguably if corruption or flawed thinking is perpetuated through time. Does that make it fair/just, or in line with the constitution? Again a flawed argument. Communication and shared information is so much more rapid in the last 20 years. That falls into Scalia's third point as well. At lastly I suspect that kicking the can to congress is a stall, in the hopes that nothing will get done. A smart tactic objectively.
https://eig.org/policy/non-compete-reform/
https://www.gao.gov/products/gao-23-103785
https://one.oecd.org/document/DAF/COMP(2019)2/en/pdf
https://home.treasury.gov/system/files/136/State-of-Labor-Market-Competition-2022.pdf
https://www.epi.org/publication/noncompete-agreements/
https://www.minneapolisfed.org/article/2021/non-compete-contracts-sideline-low-wage-workers
Full disclosure. Whenever I post one of these links, I expect no one to read them but I try and read them through a couple of times myself. I skimmed the oecd pdf because it's hella long.
Thank you for all you do!
Yawn. Non-competes are unenforceable 99% of the time. I’m sorry for the people who have been intimidated by HR and didn’t ask a lawyer. The 1% of the time they are enforceable, they are a hurdle to the Venture Capital industry, who clearly paid for the graphic in the article promising a boom in innovation.
Maybe the best thing is to not work where a non-compete is required for personal employment. You are subjecting yourself to an opressive employer
Employers using contractors to do projects within a time frame should consider protecting their entities with non-compete agreements. Entities that do research, manufacturing, and develop unique methods should be allowed to have non-disclosures with employees. Otherwise there is no reason to do research, develop new products and new methods if your employees could sell proprietary knowledge to potential competition.
Here’s an idea. TikTok US management sets an example for a better way: finance a new US employee owned company to buy it from Byte Dance, with 51% controlling interest. The rest is publically traded.
My thinking is that the employees will be motivated (without a non-compete or NDA) to not compete or disclose because they personally benefit from protecting the IP, even when they leave the company.
If they choose to sell their interest when they leave, only then a limited NDA or non-compete may be appropriate to protect fellow employee owners.
One of the major reasons I was hoping for this rule was to regulate hospitals, but my impression is that FTC rules don't cover non-profits (which many hospitals are poorly classified as). Am I mistaken? What can be done for all the doctors who are boxed in by local monopolies if not?