The FTC’s right: it’s time to junk non-compete clauses
The Federal Trade Commission (FTC), with a Democratic majority and headed by Lina Khan, has proposed new legislation banning so-called non-compete clauses, which allow employers to require employees to sign a contract agreeing they will not work in competition with them in any way for a certain period of time after terminating their contract.
Under the proposal, such clauses would be considered illegal and therefore invalid. The idea is, on the one hand, to support workers and, on the other, to foster a more innovative ecosystem. At the moment, legislation on this type of clause is not homogeneous in all states, but those that already considered them illegal, such as California, have shown a high capacity for innovation. In Spain, non-compete clauses are allowed for a maximum of two years for those considered as technical professions, and up to six months for others.
In the United States, this type of clause is common in almost half of companies, and about a third of them included them generically in the contracts of all their employees, regardless of their occupation and salary. The total number of employees affected is estimated at around 18%. In the state of Washington, for example, non-compete clauses were prohibited for workers with salaries of less than $100,000.
