You may have read that the Federal Trade Commission has proposed new rules banning non-competes. Many companies use these agreements to protect their customer base, markets and to prevent competitors from acquiring employees in whom they have invested more than a few dollars in training and who may have very valuable information between their ears.
Dr. Scott Galloway’s “No Mercy, No Malice” blog looks at the downside of non-competes from a social perspective, arguing that Silicon Valley was only possible because California prohibited such agreements and that “in 2005, economists at the Federal Reserve put forward statistical evidence supporting the theory. Apple, Disney, Google, Intel, Meta, Netflix, Oracle, and Tesla were able to succeed without limiting the options of their employees.”
Check out Dr. Galloway’s interesting blog post: “Compete.”
A WSJ article (may have a paywall) argues that the FTC’s planned ban will not hold up in court, but in the ongoing War for Talent, the ability to obtain and enforce a non-compete should not be taken for granted.