The US’ consumer protection body the Federal Trade Commission has voted to ban for-profit US employers from making employees sign agreements with ‘non-compete’ clauses.
The ban could affect tens of millions of workers, and US President Joe Biden welcomed the decision:
“The FTC is cracking down on ‘non-compete agreements,’ contracts that employers use to prevent their workers from changing jobs even if that job will pay a few dollars more, or provide better working conditions. Workers ought to have the right to choose who they want to work for.”
Locally, Labor minister and economist Dr Andrew Leigh has been pushing the issue, which is currently under consultation.
In a recent speech he made it pretty clear…
“Today, millions of Australian workers don’t have the freedom to quit their jobs and start a competing firm. There is a lot happening in the world of restraints on trade.
Australia is at the fact‑finding stage, but we know:
Job mobility is important to the whole economy
Non‑compete clauses are more widespread than we thought
Non‑compete clauses apply to lower wage workers too
Clauses can have a chilling effect on workers, impacting on labour mobility
Businesses have other options to protect their interests
No‑poach agreements between businesses could be harmful
Australia is well‑placed to learn from other countries”
More to come in the looming months.