FTC ban on Non-Competes

[statsqueen]

I'm not a lawyer, but I have questions on the application of the FTC ban on non-competes for the NCAA. How can the NCAA continue to tell coaches that they cannot work with kids in a coaching capacity of any kind at any time? I'd love to hear thoughts on this from others--especially any lawyers in the forum. (This gets at NCAA restrictions on coaches working with ONE club and coaching camps at certain times of year, as well as restrictions on working with athletes living outside the 50 mile radius).

[n00b]

Apr 26, 2024 13:32:42 GMT -5 statsqueen said:

I'm not a lawyer, but I have questions on the application of the FTC ban on non-competes for the NCAA. How can the NCAA continue to tell coaches that they cannot work with kids in a coaching capacity of any kind at any time? I'd love to hear thoughts on this from others--especially any lawyers in the forum. (This gets at NCAA restrictions on coaches working with ONE club and coaching camps at certain times of year, as well as restrictions on working with athletes living outside the 50 mile radius).

Noncompetes are about preventing an employee from leaving their job to work for a new employer in the same field. This really has nothing to do with recruiting restrictions.

[volleyguy]

A non-complete clause typically prohibits an employee from leaving one business and working for another business in the same market or field (i.e. a competitor or related sector) for a pre-defined period of time, which can sometimes be months or years. The situation you raise involves a continuing employee performing activities unrelated to their work with the primary employer, but involving a competitor or related field. The FTC ban does not prohibit an employer from restricting the outside work activities of an employee if those activities are reasonably connected to the employer's business interests, or to the employee's primary area of responsibility.

In other words, the FTC ban prohibits an employer from any action that would impede the ability of an employee at Microsoft, for example, from quitting their employment and immediately starting a job at Apple, or starting their own software company. The FTC ban does not prevent Microsoft from prohibiting its employees from working simultaneously at Apple, or starting his or her own software company while still employed at Microsoft.

[statsqueen]

Thank you both very much!

[mikegarrison]

Bottom line is that mostly people feel like it acceptable for your current employer to restrict you from seeking other employment while they are still paying you, but not after they stop paying you.

[c4ndlelight]

Apr 26, 2024 14:00:50 GMT -5 volleyguy said:

A non-complete clause typically prohibits an employee from leaving one business and working for another business in the same market or field (i.e. a competitor or related sector) for a pre-defined period of time, which can sometimes be months or years. The situation you raise involves a continuing employee performing activities unrelated to their work with the primary employer, but involving a competitor or related field. The FTC ban does not prohibit an employer from restricting the outside work activities of an employee if those activities are reasonably connected to the employer's business interests, or to the employee's primary area of responsibility.

In other words, the FTC ban prohibits an employer from any action that would impede the ability of an employee at Microsoft, for example, from quitting their employment and immediately starting a job at Apple, or starting their own software company. The FTC ban does not prevent Microsoft from prohibiting its employees from working simultaneously at Apple, or starting his or her own software company while still employed at Microsoft.

Yup. The proper college sports analogy was the transfer restrictions - i.e., if you leave one employer/school, you have to wait one year before you can work for a new employer/school. Those, of course, are already on the way out.

To be honest, most states were already trending toward not enforcing non-competes to begin with. In practice, the biggest impact of the FTC Rule is probably just publicity --> a lot of employees (particularly low-wage ones) didn't know this and were falling victim to unenforceable non-competes included for their in terrorem effect (though my state is also cracking down on that).

[slxpress]

Apr 26, 2024 21:00:22 GMT -5 c4ndlelight said:

Apr 26, 2024 14:00:50 GMT -5 volleyguy said:

A non-complete clause typically prohibits an employee from leaving one business and working for another business in the same market or field (i.e. a competitor or related sector) for a pre-defined period of time, which can sometimes be months or years. The situation you raise involves a continuing employee performing activities unrelated to their work with the primary employer, but involving a competitor or related field. The FTC ban does not prohibit an employer from restricting the outside work activities of an employee if those activities are reasonably connected to the employer's business interests, or to the employee's primary area of responsibility.

In other words, the FTC ban prohibits an employer from any action that would impede the ability of an employee at Microsoft, for example, from quitting their employment and immediately starting a job at Apple, or starting their own software company. The FTC ban does not prevent Microsoft from prohibiting its employees from working simultaneously at Apple, or starting his or her own software company while still employed at Microsoft.

Yup. The proper college sports analogy was the transfer restrictions - i.e., if you leave one employer/school, you have to wait one year before you can work for a new employer/school. Those, of course, are already on the way out.

To be honest, most states were already trending toward not enforcing non-competes to begin with. In practice, the biggest impact of the FTC Rule is probably just publicity --> a lot of employees (particularly low-wage ones) didn't know this and were falling victim to unenforceable non-competes included for their in terrorem effect (though my state is also cracking down on that).

I’ve had friends getting out of non-competes for the last 20 years in Texas. But they did have to hire competent attorneys to threaten legal action to do so. It’s still provided a barrier even when it wasn’t enforceable.