FTC Proposes New Rule to Ban Non-compete Agreements

On Thursday, January fifth, The Federal Commerce Fee (FTC) rolled out a proposal to ban employers from implementing non-compete clauses that restrict employees’ freedom to discover alternatives.

Within the freelance context, a non-compete settlement forbids you from partaking in direct or oblique competitors along with your shopper for a set time frame, doing related work for another person, and beginning your individual enterprise that would compete with the shopper.

Non-compete agreements prohibit employees from quitting their jobs and taking new jobs at rival firms or beginning up related companies of their very own inside a selected time interval. In doing so, these agreements have unfairly denied employees the liberty to alter jobs, negotiate for higher pay, and begin new companies. The FTC estimates {that a} ban on these agreements may improve wages by practically $300 billion yearly as they permit employees to pursue higher alternatives.

With the purpose of shifting the steadiness of energy from firms to employees, the rule, if finalized, wouldn’t simply ban non-competes going ahead; it might additionally require employers to rescind current non-competes and inform employees of the change. Most significantly, the proposal covers impartial contractors and interns along with full-time staff.

Non-competes are particularly a hindrance to freelancers and impartial contractors whose livelihood depends upon project-based work. The agreements restrict freelancers’ means to decide on their purchasers and preserve a number of jobs and earnings streams.

Freelancers Union has been working to ban non-compete agreements within the NYC Council and elsewhere across the nation. With the passing of the FTC rule, we’d now not should go state by state to make sure freelancers throughout the nation are afforded the chance to work with out limitations from earlier purchasers. We’re excited by this motion on the federal stage and applaud the FTC for  Remark finish standing by employees.

The rule has but to take impact. The general public has 60 days to touch upon the proposed rule, after which a last rule could possibly be revealed and enforced some months after that. We urge our members to submit a public remark to make sure this rule passes and helps freelancers work the way in which you wish to work!

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