Noncompete Agreements are Being Banned
There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this new series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!
CapForge Founder and Owner Matt Remuzzi reacts to the news of the recent ban on noncompete agreements.
Video Transcript:
Business Advice Video:
The FTC has finally voted to ban noncompete agreements. I truly believe that noncompetes are detrimental to people’s career progression. Especially as it relates to their salaries. I’m ecstatic and I want to hear your thoughts on this.
Matt’s Review:
Okay, I had heard this news too. I don’t think it’s as exciting as she thinks it is. I – at first I’m very surprised to hear that the estimate is one in five workers has a noncompete. That seems really high to me. I mean just think of all the jobs that you can, you know, just off the top of your head, nurses and firefighters and policemen and accountants and restaurant workers, and there’s not a noncompete for any of that, right? If you’re a policeman at one city and you go work another, there’s not a noncompete. You’re not gonna take your police secrets from one city to another city. Or take your criminals from one city to another city, they’re not gonna go with you. That doesn’t make any sense. And certainly, a McDonald’s worker is not taking the secret sauce recipe over to Burger King, there’s no noncompetes for that. So I’m really surprised that the estimate. And this maybe is just because it could be true, but maybe it’s wildly off or estimated from bad data, who knows? That 1 in 5 workers is under a noncompete, it just seems very surprising to me.
But even for those that are, I think the reality is they’re getting rid of it largely because it’s basically unenforceable anyway. It’s very hard to to tell someone they can’t go work somewhere else or take something they learned at one Job and apply it in another job. So I don’t think it’s a this big industry cave-in, where they just suddenly decided that they were gonna be generous and let people switch jobs. I think they realized it’s very difficult to enforce and there wasn’t – trying to fight it legally except in very few cases didn’t make any sense, right? It just wasn’t a very practical thing to try and enforce for people. And I don’t think a lot of people have been stuck in low-paying, miserable jobs but because they have a noncompete they can’t go anywhere else. I’m sure there are cases where it’s happened, but I don’t think it’s a widespread phenomenon. I don’t think it’s something that’s holding tons and tons of people back from being able to get a better-paying job cause they’re locked into some noncompete. Maybe there’s just a lot of data out there that I’m not aware of, but in my own just general experience in life, it just doesn’t seem like, I mean, I don’t, I haven’t been to any parties where people been complaining about not being able to switch jobs cause they have noncompete. Or it just doesn’t seem like it’s a top-of-mind issue that – I mean hasn’t been in the news. I don’t know. It just doesn’t seem like the big issue. So, great, they got rid of it. I think it’s probably a net benefit. But I don’t think it’s nearly as exciting and you know life-changing as this person seems to think it is. Maybe it was holding her back all these years and she’s just extrapolating from her personal experience.
