“By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”
Anna George, a veterinarian who lives outside of Sierra Vista, found herself in a job that was negatively impacting her mental health.
“I mean, just abusive, toxic, the whole nine yards,” she told The Copper Courier.
But when it came to leaving that job and finding something new, she was severely limited by a noncompete clause she had signed when she was first hired.
A noncompete is a contract employees are sometimes required to sign that bars them from competing with the employer or working for a competitor—often within a certain number of miles—during, and often after, their time working there.
“If you want to leave, you’re stuck not being able to leave because either you’re going to have a pretty significant commute or you’re going to have to move, or you’re going to have to try to buy out the noncompete or whatever the case may be,” George said.
She said if she had been bound to her noncompete after leaving her job, she would have likely had to drive an hour and a half to an hour and 45 minutes to work in her industry someplace else. Luckily, George said, her workplace lost her contract, and she was able to get out of it.
FTC Proposing a Ban
The Federal Trade Commission has proposed banning these types of agreements to protect the wellbeing of workers. President Joe Biden signed an executive order in 2021 encouraging the agency to take this action.
The agency estimates doing so could increase wages by nearly $300 million a year while also expanding career opportunities for 30 million workers.
“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said FTC Chair Lina M. Khan in a press release. “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.
According to the US Department of Treasury, up to 40% of US workers have signed a noncompete at some point.
How Noncompetes Hinder Workers
George pointed out that the veterinary profession has one of of the highest suicide rates in the US—more than four times that of the general population.
“I think there’s a lot of factors for that, but how much of that is being stuck in a job that’s miserable that you can’t really get out of very easily?” she said.
The agreements disproportionately affect women and people of color, according to the National Employment Law Project, and can be traced back to the Reconstruction Era when former owners of enslaved people used them to keep freed Black people working for them.
Another criticism of noncompetes is that they block competition among businesses.
“By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition,” Khan said in the agency’s press release.
George agreed, saying competition allows for better workplaces.
“Antitrust laws are so that one company can’t completely monopolize an industry, but we allow a company to monopolize their employees to the point where it has a negative effect on that employee’s lifestyle,” she said. “That doesn’t make any sense to me.”
The public comment period on the FTC’s proposed rule is open through March 20.