Dallas — Nearly one in five Americans is subject to a non-compete clause at work, according to the report. Federal Trade Commission (FTC).
This means that employees cannot leave their jobs to work for competing employers.of The FTC voted 2-3 on Tuesday. Approves prohibitions on new and existing noncompetition policies, to take effect within 120 days. This rule makes all non-compete clauses unenforceable, except for senior management level clauses.
Dallas employment lawyer Lodge Dunn said the ban is important news for employees who lose leverage by having to sign non-compete clauses.
“Employees are very happy about this because it increases their market value and forces incumbent companies to pay employees what they are worth. employees will turn to competitors for better pay,” Dunn said.
The FTC said the new rules could increase wages by nearly $300 billion annually and expand career opportunities for about 30 million Americans.
But the new rules face challenges.
Within hours of the vote, the U.S. Chamber of Commerce announced it would file a lawsuit to block the ban on non-compete clauses.
In Dallas, G. Brint Ryan, CEO of a global tax firm, filed suit against the ban Tuesday in federal court in the Northern District of Texas. CBS News Texas asked for a statement Wednesday, and Ryan called the new ban “unlawful.”
“There could be a world where the FTC says, let's see what happens in court,” Dunn said. He expects the ban will be hotly contested in court, potentially delaying the outcome.
Dunn predicts that employees will ultimately win this battle.
“If I had to predict, I think this ruling will be upheld in court. Once it is implemented, we will see the floodgates open. You’ll see them say, ‘Let’s sue them.’” Dunn said.
