New York City, New York – In response to the Federal Trade Commission’s proposed ban on non-compete clauses in employment agreements, media outlet CNBC recently released a video that featured comments by Milana Dostanitch, Senior Of Counsel at Lipsky Lowe LLP.
As we previously reported, the FTC proposed a new rule in January that would bar employers from imposing non-competes on employees, prohibiting them from finding comparative employment, joining their competitors or finding better jobs.
“A non-compete is a contractual clause between a worker and an employer that limits the worker’s ability to accept or seek other employment, or to start their own business for a certain period of time or within a geographical location after the employment ends,” Ms. Dostanitch told CNBC.
While employers have a legitimate interest in retaining top talent and protecting their trade secrets, non-compete clauses have proliferated from the C-Suite to hair salons and fast food chains, preventing wage earners from seeking better pay. According to the FTC, noncompetes cover about 18 percent or 1 in 5 American workers. Employees who breach non-compete agreements can face cease-and-desist letters, preliminary injunctions, and lawsuits.
“Employees can’t afford to be sued,” Dostanitch said.
While several states prohibit or restrict the use of non-competes, many employees don’t know about these restrictions or their rights, and “employers exploit the gap in knowledge,” said Milana.
The FTC’s proposed rule would prohibit employers nationwide from issuing non-competes and void all existing contracts. The commission believes a ban would expand career opportunities for 30 million Americans and increase wages by nearly $300 billion annually.
Milana told CNBC that prohibiting noncompetes would “bring bargaining power back to employees… [giving them] more options [to seek better employment opportunities].”
Although non-compete clauses are enforceable, the courts in New York are reluctant to enforce overly restrictive non-competes. When/if the FTC will issue a final rule and whether such a rule would withstand legal challenges (The U.S. Chamber of Commerce has threatened to sue) remains to be seen. In the meantime, the best way for employees to protect their rights is to work with Milana Dostanitch and the team at Lipsky Lowe.
From our 40-plus years practicing employment law, we have learned how important it is to treat each client individually, to listen carefully to the details of each issue, and to tailor our advice and strategy to each client’s specific needs. Our in-depth knowledge of federal, New York State, New York City, and New Jersey employment statutes and regulations, coupled with our understanding of legal strategies and tactics, allow us to effectively represent our clients whether the desired outcome is litigation through trial or an amicable, early settlement resolution.
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