Employee Survival Guide®
The Employee Survival Guide® is an employment law podcast only for employees about everything related to work and your career. We will share with you all the employment law information your employer and Human Resources does not want you to know about working and guide you through various work and employment law issues. This is an employee podcast.
The Employee Survival Guide® podcast is hosted by seasoned Employment Law Attorney Mark Carey, who has only practiced in the area of Employment Law for the past 29 years. Mark has seen just about every type of employment law and work dispute there is and has filed several hundred work related lawsuits in state and federal courts around the country, including class action suits. He has a no frills and blunt approach to employment law and work issues faced by millions of workers nationwide. Mark endeavors to provide both sides to each and every issue discussed on the podcast so you can make an informed decision. Again, this is a podcast only for employees.
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Employee Survival Guide®
Noncompetition Agreements: Are They Still Enforceable in 2026? (FTC Update)
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Did you know that noncompete agreements affect nearly 30 million workers across various industries, stifling their career growth and limiting their job mobility? In this enlightening episode of the Employee Survival Guide®, Mark Carey dives deep into the Federal Trade Commission's (FTC) bold move to potentially ban these restrictive clauses that have long been a barrier to employee empowerment and fair competition. Joined by a knowledgeable guest, they unpack the implications of this critical rule change, highlighting how non-compete agreements can suppress wages, restrict innovation, and create a hostile work environment for countless employees.
The FTC asserts that these agreements are not just unfair—they're detrimental to the economy as a whole. Through compelling case studies and economic analyses, Mark and his guest reveal the real-world impact of non-competes on the workforce, illustrating how they contribute to discrimination in the workplace and hinder career development opportunities. But it’s not all one-sided; the Chamber of Commerce and companies like Ryan LLC are raising alarms, arguing that the FTC may be overstepping its authority. They warn that a blanket ban could lead to unintended consequences, including increased litigation and reduced investment in employee training, which could ultimately harm the very workers the FTC aims to protect.
This episode doesn't shy away from the philosophical debate at play—should we prioritize protecting businesses or fostering competition and employee rights? Mark encourages listeners to critically evaluate the arguments on both sides of this complex issue, especially as it pertains to navigating employment law and understanding workplace policies. The ongoing legal battle over the FTC's authority to regulate non-competes could have ripple effects on regulatory power in the future, making it essential for employees to stay informed and engaged.
Whether you’re navigating employment contracts, facing work disputes, or simply seeking to understand your rights in the workplace, this episode of the Employee Survival Guide® is a must-listen. Tune in for insider tips on negotiating severance packages, understanding employment law issues, and empowering yourself in the face of workplace challenges. Don't let non-compete agreements dictate your career—take charge of your future with the knowledge and resources shared in this episode!
If you enjoyed this episode of the Employee Survival Guide please like us on Facebook, Twitter and LinkedIn. We would really appreciate if you could leave a review of this podcast on your favorite podcast player such as Apple Podcasts and Spotify. Leaving a review will inform other listeners you found the content on this podcast is important in the area of employment law in the United States.
For more information, please contact our employment attorneys at Carey & Associates, P.C. at 203-255-4150, www.capclaw.com.
Disclaimer: For educational use only, not intended to be legal advice.
Introduction to FTC Non-Compete Ban
Speaker 1All right. So you've really buried us in paperwork this time. It's like a whole stack of legal briefs and documents, all about the FTC's attempt to ban non-competes.
Speaker 2Yeah.
Speaker 1It looks like we've got briefs from the FTC themselves, obviously, pushback from the Chamber of Commerce and even a statement from a company called Ryan LLC, who seems to be right in the middle of it all.
Speaker 2Yes.
Speaker 1So are you ready to dive into this one?
Speaker 2Oh, absolutely, and it's a really interesting time to be looking at this issue. You know, this is not just some kind of legal technicality. Here the FTC is really aiming to like fundamentally change the rules of the game for an estimated 30 million workers Wow Across all sorts of industries.
Speaker 1Yeah, that is a huge number of people it is. So maybe just to get our listeners up to speed. Yeah, could you quickly explain exactly what the FTC is trying to do with this non-compete rule?
Speaker 2Sure. So essentially they're trying to make it illegal for companies to use non-compete agreements in almost any situation. So you know those clauses that you see in contracts that say like if you leave this job you can't go work for a competitor for, you know, six months or a year or whatever it is yeah. Poof gone.
Speaker 1Wow.
Speaker 2At least that's the FTC's goal.
Speaker 1That's pretty sweeping. It is no wonder everybody's lawyering up.
Speaker 2Yeah.
Speaker 1So let's start with the FTC side of things.
Speaker 2What's the main thrust of their argument here? Well, they're really coming out swinging. They're arguing that non-competes are inherently unfair methods of competition which are illegal under the FTC Act, and they're not just going after you know, specific companies that are using them in a bad way, or whatever. They're really saying that the very existence of these agreements is harmful to workers and stifles the entire economy.
Speaker 1OK, but how are they backing that up Like do they have any specific examples of this?
Speaker 2Yeah, absolutely so. For example, in their brief they talk about the case of the software engineer who was bound by a non-compete after leaving his job.
Speaker 1Oh really.
Speaker 2And he had, you know, this great idea for a new app, but he couldn't develop it for two years because of the agreement. Wow, idea for a new app, but he couldn't develop it for two years because of the agreement. And you know, FTC argues that this kind of situation is preventing innovation across all sorts of different industries.
Speaker 1So it's not even just about, you know, protecting workers from some kind of you know, unfair contract. They're really saying that these agreements are holding back you know progress, in a way.
Speaker 2Exactly yeah. And they also claim that non-competes suppress wages by limiting workers' options, you know, makes it harder for them to negotiate for better pay and benefits if they can't, you know, easily go work for a competitor.
Speaker 1Yeah, thanks Anne.
Speaker 2And they also argue that these agreements discourage companies from investing and training for their employees.
Speaker 1Okay, how so?
Speaker 2Well, because they're afraid that the employees will just, you know, take those skills and go to a competitor, right? So it's kind of a lose-lose situation.
Speaker 1Yeah, it sounds like they're kind of painting this picture of like a ripple effect where, you know these agreements are impacting everything from, you know, individual salaries to, like, the competitiveness of whole industries.
FTC's Core Arguments Against Non-Competes
Speaker 2That's their core argument. Yeah, and they're really bringing like a mountain of evidence to support it. They've got economic studies, they've got public comments from workers and businesses and you know their own internal analyses.
Speaker 1Wow.
Speaker 2They're really trying to demonstrate that this is a, you know, carefully considered conclusion and not just some kind of knee jerk reaction.
Speaker 1Yeah, but obviously not everyone is buying it. The.
Speaker 2Chamber of Commerce, for one, is pushing back pretty hard. Oh yeah, definitely their brief comes out with guns blazing.
Speaker 1OK.
Speaker 2They basically say that the FTC is massively overstepping its authority.
Speaker 1Wow.
Speaker 2OK, they argue that the FTC Act doesn't actually give the agency the power to issue, you know, like a blanket ban on a business practice that's been around for so long.
Speaker 1So it's kind of a power struggle then, like they're saying that the FTC is trying to act like Congress, you know, making new laws instead of just enforcing the existing ones.
Chamber of Commerce's Legal Opposition
Speaker 2That's really the heart of their argument. Yeah, they're calling this a classic major questions doctrine case and this doctrine basically says that you know, when an agency is trying to regulate something that has like huge economic and political implications, they need clear direction from Congress to do so. And the chamber is arguing that Congress never gave the FTC this kind of power over non-competes.
Speaker 1So their argument really hinges on, like, the scope of the FTC's authority and whether they're exceeding it with this rule. Okay, well, what about Ryan LLC?
Speaker 2I mean, they're coming at this from kind of a more practical, business oriented perspective right, exactly, yeah, they're a tax consulting firm and their brief basically argues that banning non-competes would be like a direct threat to their business.
Speaker 1Oh, wow.
Speaker 2They say that they rely on these agreements to protect their trade secrets and client relationships, which they've built up over many years.
Speaker 1So for them it's really about the potential for like immediate harm, Like they're imagining. You know, employees walking out the door and taking clients with them to a competitor Exactly.
Speaker 2Yeah, yeah. And they argue that without non-competes, they'd constantly be honorable to poaching and they wouldn't be able to invest as much in specialized training for their employees.
Speaker 1Yeah.
Ryan LLC's Business Perspective
Speaker 2Because you know what's the point if they're just going to leave, right. So they're basically saying that this rule would throw their whole industry into chaos.
Speaker 1Wow.
Speaker 2Yeah.
Speaker 1It's interesting how they're highlighting that tension, you know, between protecting businesses on the one hand and then kind of fostering a competitive market that benefits everyone on the other hand.
Speaker 2Yeah, it's a. It's a key philosophical question at the heart of this whole debate and and it actually gets even more complicated when you start to look at those constitutional concerns that the Chamber of Commerce is raising.
Speaker 1Yeah, they're not just saying the FTC is overreaching concerns that the Chamber of Commerce is raising. Yeah, they're not just saying the FTC is, you know, overreaching, they're actually kind of questioning the whole structure of the agency and whether it even allows for this kind of power.
Speaker 2Exactly and with, you know, limited presidential oversight, you know, is that even constitutional?
Speaker 1Yeah, so hold on. I'm talking about like a potential constitutional crisis over non-compete agreements here. I mean, that seems like a pretty big leap.
Speaker 2Well, it might seem like a stretch at first, but it really does get to the core of how our government is designed. You know, the opposition is basically arguing that the FPC is acting like a mini-Congress. You know they're unilaterally making major economic policy without any of the checks and balances that the Constitution requires, and they're saying that. You know this kind of power grab upsets the separation of powers and it could have implications far beyond just you know this one rule about non-competes that's a.
Speaker 1that's a pretty heady argument, but it sounds like the FTC is prepared to defend their position. I mean, they obviously think they're on solid legal ground.
Speaker 2Oh yeah, definitely, and a lot of it hinges on their interpretation of the word prevent in the FTC Act. They're basically saying that prevent gives them broad authority to regulate entire industries proactively. You know, they don't have to wait for someone to break the law. They can step in and prevent the harm from happening in the first place.
Speaker 1So it all comes down to like one word it's amazing how these like tiny details can become like these huge battlegrounds in legal cases.
Speaker 2Absolutely. It's like they're trying to decipher some kind of secret code. You know where each side is trying to unlock the. You know the true meaning hidden within the language of the law and actually speaking of code. Another interesting point the Chamber of Commerce brings up is that Congress specifically granted the FTC rulemaking power for unfair or deceptive practices, but they were totally silent on unfair methods of competition.
Speaker 1So they're saying like if Congress wanted the FTC to have this power, they would have written it down explicitly.
Speaker 2Exactly. It's a classic argument. You know statutory interpretation. The opposition is basically saying that. You know, congress knew what it was doing and they chose to give the FTC you know limited authority in this particular area.
Constitutional Questions and Agency Authority
Speaker 1So we've got this back and forth over. You know the FTC's authority and how to interpret the law, but what about the evidence itself? I mean, is the FTC actually proving that non-competes are always harmful?
Speaker 2Well, that's another major point of contention. You know, the FTC cites all these studies showing that non-competes suppress wages and stifle innovation. But the opposition points out that a lot of those studies are really focused on specific states, not necessarily the nationwide impact that a ban would have.
Speaker 1So are they saying that the FTC's evidence is kind of like not representative enough to justify such a sweeping rules like trying to predict the weather for the whole country based on, like a couple of weather stations?
Speaker 2Yeah, that's a good analogy. The Chamber of Commerce is arguing that the FTC is overgeneralizing from limited data and that a nationwide ban could have all these unintended consequences that those state level studies just don't capture.
Speaker 1OK, well, what about the potential costs of this rule? I mean, we've heard Ryan LLC's concerns about losing trade secrets and clients, but does the chamber make any broader economic arguments?
Speaker 2Oh yeah they. They claim that the FTC's cost benefit analysis is like totally incomplete and ignores, you know all these significant downsides. For one thing, they argue that banning non-competes could actually discourage companies from investing in training for their employees. Oh interesting Because there's no guarantee that those employees will actually stick around to use those skills you know.
Speaker 1So instead of protecting workers it could kind of backfire and make them like less desirable hires.
Speaker 2Yeah, it's kind of a weird twist, right? Yeah, and they also raise concerns about, you know, increased litigation even if it's a different kind of litigation than we have now.
Speaker 1Yeah.
Speaker 2They argue that without you know these clear non-compete agreements, companies might be more likely to sue each other over trade secret theft or unfair competition. You know, so you could end up with even more legal battles and uncertainty.
Speaker 1It sounds like they're saying the FTC is trying to solve one problem, right, but they might be creating a whole bunch of new ones in the process.
Speaker 2Right, and you know. They argue that all of these costs could ultimately trickle down to consumers in the form of higher prices.
Speaker 1Oh OK.
Speaker 2You know their argument is that when businesses face more uncertainty and more risk, you know those costs often get passed along.
Evidence Debate and Economic Impact
Speaker 1So the Chamber of Commerce is painting this picture of all these unintended consequences. You know, less investment, more lawsuits and potentially higher prices for consumers. Right, it's a pretty stark contrast to the FTC's vision of, you know, a more competitive and dynamic economy.
Speaker 2Yeah.
Speaker 1But you know, this whole debate has really got me thinking about my own experiences.
Speaker 2Oh yeah, what comes to mind?
Speaker 1Well, I've, you know, I've signed a few non-competes in my time and, honestly, I always felt kind of trapped by them. You know, yeah, it's like, even if you're unhappy in a job, the thought of being like legally barred from working in your field for, you know, a year or more, that's pretty daunting.
Speaker 2Right.
Speaker 1It definitely makes you think twice about leaving, even if it's the right move for you.
Speaker 2Yeah, that's a. That's a really important point. You know that psychological impact of non-competes is something that the FTC really emphasizes in their brief.
Speaker 1OK.
Speaker 2You know they argue that these agreements create this chilling effect on worker mobility. Yeah, you know, it discourages people from even like exploring new opportunities.
Speaker 1And that makes sense, right, Like if you're constantly worried about like legal repercussions you're less likely to, you know, take risks or start your own business or even just negotiate for better pay at a different company.
Speaker 2Exactly. You know the FTC argues that this fear factor ultimately hurts innovation and economic growth. You know they want to empower workers to pursue their best interests without being shackled by, you know, these overly restrictive contracts.
Speaker 1But on the flip side, you know, I can also kind of see the argument for businesses wanting to protect their investments.
Speaker 2Yeah.
Speaker 1Like, if a company spends a lot of time and money you know training an employee, it seems kind of fair that they'd want some assurance that those skills won't immediately be used against them by a competitor.
Speaker 2Yeah, that's really the heart of the debate, you know, finding that right balance between protecting businesses and, you know, fostering a competitive market that benefits everyone. And that's where you know this case could have ripple effects far beyond non-competes. You know it's setting a precedent for how much power agencies like the FTC have to really reshape entire industries.
Speaker 1So, even if you're not directly affected by non-competes, this case could impact you know how other regulations are crafted and enforced in the future.
Speaker 2Absolutely yeah. The outcome of this case could either, you know, embolden agencies to take a more assertive role, or it could force them to kind of, you know, rein in their ambitions and defer more to Congress. It all depends on how the courts ultimately interpret the FTC's authority in this case.
Personal Impacts and Worker Mobility
Speaker 1So where do things stand now? Like is there any indication of which way this legal battle might swing?
Speaker 2Well, it's already been kind of a roller coaster ride. You know, a district court actually sided with the Chamber of Commerce and issued a nationwide injunction against the rule. So basically putting it on hold for now.
Speaker 1So round, one goes to the opposition.
Speaker 2For now, yeah, but the FTC is appealing that decision. So you know, this fight is far from over. Oh wow, it could easily end up before the Supreme Court, which would obviously have massive implications for the balance of power between agencies and Congress.
Speaker 1Yeah, a potential Supreme Court showdown. I mean that definitely raises the stakes. It sounds like this is a case worth watching closely, no matter what industry you're in.
Speaker 2Absolutely. You know, this deep dive has really revealed not just a legal battle over non-competes but a deeper struggle over the very nature of regulatory power in America. You know this case could have a lasting impact on how agencies operate and how businesses function, you know, for years to come.
Speaker 1So what's the? You know what's the main takeaway for our listener who's been waiting through all these? You know, legal briefs with us. What's the? So what for them?
Speaker 2I think the key takeaway is that you know even these seemingly technical legal disputes can have really profound consequences for everyone. You know this case is a reminder to pay attention to the regulations that are being debated out there and the potential impact that could have on your work, your industry, even the broader economy.
Speaker 1It's also a reminder that you know there are often valid arguments on both sides of these really complex issues. It's not always a clear cut case of you know good versus bad.
Speaker 2Right.
Speaker 1And it's important to you know, try to understand the nuances and the trade-offs involved.
Legal Status and Future Implications
Speaker 2Exactly. And as this story, you know, continues to unfold, I really encourage our listener to you know, think critically about the arguments, the evidence, the implications for themselves and the world around them.
Speaker 1Yeah, don't just accept what you hear at face value, you know, do your own research. Yeah, accept what you hear at face value, do your own research, consider different perspectives and stay informed about those potential ripple effects. That's what makes being quote unquote well-informed so rewarding. It really empowers you to make your own judgments and kind of navigate a complex world.
Speaker 2And who knows, maybe one day you'll be sending us some source material for a deep dive. We're always up for a challenge.
Speaker 1All right. Thanks for joining me for this deep dive.
Speaker 2My pleasure.