“You’re not really free if you don’t have the right to switch jobs or choose what to do with your labor,” Lina Kahn, the chair of the Federal Trade Commission, wrote earlier this month. But thanks to noncompete clauses that ban employees from working for similar businesses if they leave their jobs, that is the reality for millions of Americans. Under Khan, the FTC wants to eliminate that practice. On January 5, the agency, which is responsible for regulating businesses so they don’t engage in unfair and uncompetitive practices, announced a proposed rule that would make noncompete clauses illegal.
“Non-union workers have one source of power with respect to their employers, and it is their ability to quit,” said Heidi Shierholz, president of the Economic Policy Institute. “The only thing they have is the ability to say, ‘If you’re not paying a competitive wage, I’m just going to go somewhere else.’” Even if they don’t leave, it often takes a credible outside offer to get an employer give someone a raise.
Noncompetes erase workers’ power to improve their incomes, then, by removing the best card they can play. Having that power back would be significant. The FTC has estimated that its proposed ban, if enacted, will raise wages by nearly $300 billion a year. Evan Starr, an associate professor at the University of Maryland who has studied noncompetes, argues that this is a low estimate, because when firms can no longer game a patchwork of state laws to keep using them, the...
A slew of NYPD officers recounted on Sunday horror stories from their careers in which they say they were falsely accused of sexual misconduct and, despite being exonerated, had the allegations sh...