Dallas employment attorney says the noncompete ban will make it through legal challenges
DALLAS — Nearly one in five Americans are subject to a noncompete clause at work, according to the Federal Trade Commission (FTC).
This means employees cannot leave their job to work for a competing employer. The FTC voted 2-3 on Tuesday to approve a ban against new and existing noncompete policies, which will take effect in 120 days. The rule makes all noncompete clauses unenforceable, except for those at a senior executive level.
Dallas employment attorney Rogge Dunn said the ban is significant news for employees who lose their leverage when having to sign a noncompete clause.
"Employees are ecstatic about this because it makes them more marketable, and it forces their current company to pay them what they're worth. Otherwise, they will go down the street to their competition for better pay," Dunn said.
The FTC said the new rule could increase wages by nearly $300 billion per year and boost career opportunities for about 30 million Americans.
However, the new rule faces challenges.
Within hours of the vote, the U.S. Chamber of Commerce announced it would sue to block the ban on noncompete clauses.
In Dallas, G. Brint Ryan, CEO of a Global Tax Firm, filed a lawsuit Tuesday in federal court for the Northern District of Texas against the ban. CBS News Texas reached out for a statement Wednesday, in which Ryan described the new ban as "unlawful."
"There may be a world where the FTC kicks the can down the road and says, let's wait to see how this works out in court first," Dunn said. He expects the ban to be heavily challenged in court, possibly delaying results.
Dunn predicts employees will ultimately win this battle.
"If I had to predict, I think it will be upheld in court. Once it goes into effect, you will see the floodgates open. I think you will see tens of thousands of employees move and say 'I dare you to sue me,'" Dunn said.