This suggested rule could make it easier to find a job after you leave or lose one

A man exits an office with a box of his things after leaving.

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It can give workers more freedom.


the main points

  • Incomplete clauses can limit workers’ options when they separate from their employers.
  • The new proposal could give workers more rights to pursue whatever work they want.

When you accept a new job, it is only natural that you will have to fill out a bunch of paperwork. This may include tax forms and a range of different contracts designed to protect your employer.

One such contract is an incomplete contract. Whether you sign one as its own agreement or as a clause within a larger employment contract, the lack of competitiveness effectively prevents you from working with your employer’s competitors for a period of time after parting ways with that company. You might, for example, be required to sign a no-advance declaration prohibiting you from working for a competitor for six or nine months after you leave your job—whether voluntarily or because of a layoff.

But the number of non-competing people can be very limited. Let’s say you have specialized skills and work in a fairly niche industry. In this case, there is a good chance that any other company seeking to hire you will be seen as a competitor to the employer. That could leave you in the very difficult situation of not being able to work for several months – and having to completely deplete your savings as a result.

But a new proposal could make imperfect clauses and agreements a thing of the past. And if it does, it could be a very positive development for the workers.

When a contract holds you back

Currently, non-compete is not illegal, although in some cases, it can be difficult to enforce. But the Federal Trade Commission recently proposed a new rule calling for non-competitors to be banned. If this is done, it could open the door to more job opportunities for the many workers who end up parting ways with their employers.

Not only does this new proposal seek to ban non-competitors, but it also seeks to eliminate existing non-contestants who have already been signed. Finally, almost every industry could be affected by this change.

What makes non-racers so frustrating for workers is that their language is often hazy and open to interpretation. Some non-competitors, for example, do not clearly define what a competitor is. This makes it difficult to know which job opportunities workers are legally allowed to pursue once they separate from their employer.

Even worse, workers are not relieved of their incomplete obligations in situations where they are laid off through no fault of their own. Now, imagine that you are a dedicated worker who has just lost his job because your company needs to downsize. You did nothing wrong, and it wasn’t your choice to quit your job. However, you are now stuck with limited options for finding a new role thanks to your inability to compete. If this proposal is implemented, all of that could change.

An important development

The National Employment Bill estimates that more than 30 million workers—at least 18% of the total workforce in the United States—are forced to sign an incomplete clause as a condition of employment. Banning non-competes can help ensure that millions of workers do not experience undue hardship in finding jobs because of these unilateral clauses and agreements.

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