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Is the end near for non-compete agreements?

On Behalf of | Jul 28, 2021 | Blog |

When you started working for an employer in Minnesota, you likely had to sign certain documents before you could start your job, and one of these documents may have been a non-competition agreement. These documents restrict where a person can work after leaving a business. Here’s a closer look at government efforts to put an end to these agreements.

Promoting competition for the economy

The federal government wants to help ensure that the economy in the United States remains competitive. To help achieve this goal, President Biden enlisted assistance from the Federal Trade Commission. Biden’s request to the FTC was to write a rule that limits the “unfair use of non-compete clauses.”

Opposition and support regarding the order

Those who support the end of non-compete clauses argue that these documents scare workers away from leaving their jobs. These individuals argue that when workers are afraid to leave their jobs, it reduces job churn and could negatively impact the United States’ economy.

However, many government officials are arguing against the rule concerning this area of business law. Opponents of this executive order feel that it could cause employers to stop investing so much money into their employees. One of the FTC’s commissioners feels that drafting rules about a non-compete clause shouldn’t be a major concern for the government.

The end of non-competition agreements might soon be near depending on what rules get drafted by the FTC. If a company needs legal representation in the face of ever-changing laws, it may be helpful to contact a business and commercial law attorney. A legal professional may help a company draft contracts that benefit both employers and their workers.