FTC’s noncompete decision signals major shifts in IT job market ahead

Room for debate

The decision caused a partisan divide among FTC commissioners, with the FTC’s two Republican members opposing the rule. They argued that the FTC overstepped its bounds and that Congress should legislate such regulatory changes.

Shortly after the ruling, the US Chamber of Commerce announced its intention to challenge the ban in court, criticizing it as “unnecessary and unlawful” and warning that it might compromise the competitive edge of American businesses. The Chamber’s strong reaction underscores the contentious nature of this new rule and signals a heated legal battle ahead. The Chamber’s mission is to advocate for the interests of business and free enterprise.

Senior tech workers may be less affected by the ruling. Keith Noe, an intellectual property lawyer with Lando & Anastasi, pointed out that the ban has a carve-out for “senior executives” making over $151,164 annually in “policy-making” roles. He said, “A CIO may fall within this category, and senior developers may as well.”

Gregory S. Bombard, a trial lawyer for tech noncompetition agreements, pointed out that there are “some significant questions” about whether the FTC has the legal authority to ban the enforcement of noncompete agreements.

“The US Chamber of Commerce has already filed a lawsuit challenging the FTC’s action. We will have to see how legal challenges to the FTC’s rule play out,” he said.

According to Bombard, if the FTC’s rule is upheld and becomes effective, software industry employers will likely focus more on protecting trade secrets.