Established 1958 ~ Hardball Business Litigation & Complex Negotiations

Can Non-Compete Agreements be Banned?

The Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Protect Your Rights as an Employee.

Recently, the Federal Trade Commission (FTC) announced that non-compete agreements could be banned, removing the standard workplace practice of restricting a worker’s ability to move between jobs. These contracts have been used in the past to protect companies’ trade secrets and other confidential corporate information by preventing employees from leaving for a rival company, competing with their current employer, or sharing confidential information.

The FTC states that these agreements can restrict innovation and harm workers’ ability to earn more money. With this in mind, it is essential to look at the pros and cons of banning non-compete agreements, both for employers and employees.

What is a Non-Compete Agreement?

In today’s competitive business landscape, non-compete agreements are becoming an increasingly common way for employers to protect their trade secrets and other confidential information from competitors. These contracts usually involve a worker agreeing not to leave the company and join a rival business or take advantage of any opportunities with a competitor within a specified period of time. Additionally, they may also include clauses restricting employees from developing inventions using the same skills they acquired while working at their current job.

The purpose of non-compete agreements is to ensure that employees do not leave their current company with confidential information or use knowledge gained on the job to benefit other companies. On the flip side, some argue that these contracts can be overly restrictive and ultimately limit employees’ ability to progress in terms of wage increases or future opportunities. Ultimately, it is up to companies and their workers to determine if and when non-competition contracts should be used‌ and whether the FTC formally bans them as a corporate practice.

Pros of Banning Non-Competes

From an employee standpoint, one main benefit of banning non-compete agreements is that they will no longer feel restricted from pursuing new opportunities. This means they can join rival companies or pursue higher wages without fear of legal repercussions. Additionally, these individuals will have increased freedom to innovate, as they won’t be limited by any clauses restricting their actions.

For companies, a ban on non-compete agreements could result in access to a larger pool of qualified candidates and new ideas. Since the best talent may not want to work under conditions that limit their future opportunities, this would give them more incentive to come work for a new company. Moreover, having a wider selection of job applicants could create greater competition between potential employees, which could lead to better quality work overall.

Cons of Banning Non-Competes

Despite the potential benefits mentioned above, there are some downsides to banning non-compete agreements for both parties involved. For instance, it may become easier for former employees who know sensitive information about your business to leave with it and use it against your company if they move onto a new organization within the same industry. Thus, businesses need access to legal recourse if this situation arises.

Employers may argue that a ban on non-competes would make it too difficult for them to retain their top talent, since nothing would prevent them from going elsewhere. Companies might also worry that without any restrictions on development outside the workplace, some employees may contribute their own ideas towards competitors instead of developing new ones specifically for their current employer’s use.

The Philadelphia Employment Lawyers at Sidkoff, Pincus & Green P.C. Protect Your Rights as an Employee

To discuss your legal options, speak with the Philadelphia employment lawyers at Sidkoff, Pincus & Green P.C. Contact us online or call us at 215-574-0600. With offices in Philadelphia, we proudly serve our neighbors in South Jersey, Pennsylvania, and New Jersey.