LANSING — Michigan Attorney General Dana Nessel joined a coalition, led by California, New Jersey, and the District of Columbia, in submitting comments in support of the Federal Trade Commission’s proposed rule that would eliminate non-compete clauses in employment contracts in most circumstances.
In a letter sent to Federal Trade Commission Chair Lina Khan, AG Nessel joined 18 states in supporting the proposed national rule.
In January, the FTC proposed the Non-Compete Clause Rule, which would bar employers from preventing workers from working for or establishing a competing business within a certain time period after leaving a job. Approximately 18 percent of labor force participants were bound by non-competes in 2014, and 38 percent had agreed to one in the past, usually because employers insisted on them, and employees lacked a meaningful ability to negotiate them. The proposed rule concludes that non-competes are an unfair method of competition that can depress worker wages, reduce racial and gender equality in workplaces, and create legal hurdles for employees looking to advance their careers. Currently, the legality of such non-compete agreements is left to the states, creating confusion for workers and distorting labor markets that cover more than one state.
“Post-employment restrictions like these have an adverse effect on workers, especially low-wage workers and those who are part of the ‘gig economy’ and tend to change jobs often,” Nessel said. “Non-compete...
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