I’ve referenced the excellent Money Stuff newsletter before, and I continue to absolutely recommend it to anybody with an interest in the world of finance. The most recent article: The FTC Comes for Noncompetes which is particularly relevant for anybody working in the field.
Yesterday, the US Federal Trade Commission voted to ban employee noncompete agreements in the US. Future noncompetes are banned; existing noncompetes are enforceable only for senior executives. The rule goes into effect in six months, and there will definitely be lawsuits to block it.
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In the financial industry, there is a common norm that, if you leave a job, you are not allowed to work for a competitor for some period of months or years, during which you are still paid by your old employer. This makes it harder for you to get a new job and reduces your negotiating leverage at your current job, and if you do leave, the enforced time off devalues your skills and holds back your career. On the other hand: year-long vacation! There are probably some people who structure their financial careers around maximizing gardening leave. Did the FTC end that?
I don’t think so, though it’s a little unclear.
Apparently non-competes have become rampant also outside of finance and tech, with even sandwich shop chains now requiring them. So yeah, something clearly has to change.