If the FTC has its way, non-compete agreements will soon be a thing of the past.
On January 5th, 2023, the FTC proposed a new rule that would invalidate all current non-compete agreements and totally prohibit new non-compete agreements in the future. The proposed rule is currently in a public review phase. If approved, it will apply to all American employers.
Employee Benefit News recently published an article covering this important story that heavily features Vathana Sivanesan, HR Consulting and Benefits Counsel for OneDigital’s Compliance team. Vathana was able to use her rich legal background to analyze the proposed rule in question and unpack its possible ramifications on American businesses:
Non-competes traditionally were to help employers protect their valuable confidential information accessed by highly compensated employees and upper management. But there's concern that non-competes are used on lower-wage individuals who might not even have that kind of information.
It's affecting way more Americans than it should. Removing a non-compete means that workers can freely leave their employer, have more opportunities for advancement with a different employer and even pursue higher wages. But employers are probably afraid of their current employees leaving their organization for a direct competitor and sharing trade secrets.
— Vathana Sivanesan, HR Consulting and Benefits Counsel, Compliance
Read the full Employee Benefits News article here.
To learn more about the proposed FTC rule, check out this blog: FTC Proposed Ban of Non-Competes.
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