Imagine you take a new job, a higher paying one with more responsibility that represents a step up in your career, only to receive a letter from your former employer threatening to sue you unless you quit.
The letter might ask you to “cease and desist” and remind you that you signed a noncompete agreement barring you from working for one of their competitors. If you decide to ignore the warning, you could end up in court.
Noncompete agreements have become increasingly common. According to the Economic Policy Institute, at least 36 million workers, or 27.8% of workers in the private sector, have signed them.
Although they were originally a way to protect a company’s trade secrets or other confidential information, today they are used in low-wage industries to keep workers at their jobs. They suppress workers’ incomes and derail their careers. Women and people of color are disproportionately impacted.
That’s why AFSCME supports a new rule by the Federal Trade Commission (FTC) that seeks to ban employers from imposing noncompete agreements on their workers. The new rule could increase wages by nearly $300 billion a year and expand career opportunities for 30 million workers, the agency estimates.
“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said the FTC’s Chair, Lina M. Khan. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand. By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”