The Federal Trade Commission (FTC) said this week that it has taken legal actions designed "to halt unlawful noncompete restrictions" imposed by three companies and two individuals.
According to the FTC posting, "Each of the companies and individuals illegally imposed noncompete restrictions on workers in positions ranging from low-wage security guards to manufacturing workers to engineers that barred them from seeking or accepting work with another employer or operating a competing business after they left the companies."
The FTC argues in its legal filing that "noncompete restrictions harm both workers and competing businesses. For workers, noncompete restrictions lead to lower wages and salaries, reduced benefits, and less favorable working conditions. For businesses, these restrictions block competitors from entering and expanding their businesses. The FTC recently issued a statement that restored the agency’s policy of vigorously enforcing Section 5’s prohibition on unfair methods of competition."
“These cases highlight how noncompetes can block workers from securing higher wages and prevent businesses from being able to compete,” sats FTC Chair Lina M. Khan.
- KC's View:
Interesting development, and not just because the implications could be positive for folks who find themselves subject to onerous non-compete clauses. It also points to how the FTC is seeing the issue of competition, which likely will play out in how it deals with other antitrust issues.