I see that the FTC banned it and (from what I see) it seems like a good thing. Why?
In: Economics
Non-compete clauses say that you can’t work for a company’s competitors after leaving or being fired from that job.
Why is it good?
Imagine you’re say, a guitar builder of 10 years. You studied luthiery after high school, you apprenticed, and you now hold a guitar building position in a guitar company. All you know is guitar building. You live, eat, and breathe guitar building.
You also sign a non-compete clause.
One day you decide to leave the company because you moved to a place that’s too far for a commute.
Congratulations, legally speaking you “can’t” be a guitar builder anymore. Because of the non-compete, you can’t work for another guitar company because they’re your previous job’s competitors. You also can’t make your own guitar building business because you’re not competing against your old job.
Now you’re back to zero.
You have to do something else unrelated to guitar building, the one thing that makes you a living. You’d have to do something unrelated like, I don’t know, customer support, and make sure it’s not for other guitar companies.
So as you can see, non-compete clauses are all about companies trying to keep ahead of other competitors by sacrificing the livelihood of the people who work for them.
Keeping expertise out by making manpower collateral damage as if “salting the earth”, not doing their jobs better, is what keeps these companies “ahead”.
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