Speaker 1: From Bloomberg News and iHeartRadio. It's the Big Take. I'm Westkasova. Today,
Speaker 1: the Biden administration moves to stop employers from blocking the
Speaker 1: exits non compete clauses in the workplace, where you agree
Speaker 1: when you take a job that you won't quit and
Speaker 1: go to a direct competitor. We're originally intended to discourage
Speaker 1: people who gain highly specialized training and skills at one
Speaker 1: company from taking that valuable knowledge to arrival. The number
Speaker 1: of people who fit that description is fairly small, but
Speaker 1: over the years, more and more companies started requiring new
Speaker 1: hires to sign on compete agreements for jobs of all kinds. Hairdressers,
Speaker 1: security guards, doctors, even fast food workers are often owned
Speaker 1: by these agreements, which effectively freeze people in place, making
Speaker 1: it difficult or impossible for them to leave their job
Speaker 1: for a better offer in the same field. Some states
Speaker 1: have already taken steps to declare many of these agreements unenforceable,
Speaker 1: and now the Federal Trade Commission is also looking to
Speaker 1: restrict their use nationwide. Bloomberg reporter Leah and Nylon covers
Speaker 1: the Federal Trade Commission, and she joins me now to
Speaker 1: explain what's happening, Leah, Can you start by telling us
Speaker 1: why the Federal Trade Commission decided to go after these
Speaker 1: non compete agreements? Yeah, Actually, it's pretty interesting. The FTC
Speaker 1: has been looking at non competes for a while now.
Speaker 1: It wasn't just under the Biden administration. During the Trump administration,
Speaker 1: they sort of started this initiative because there were a
Speaker 1: lot of state attorneys general who were bringing cases challenging
Speaker 1: some of these noncompetes. One of the most famous ones
Speaker 1: involves Jimmy john Sandwiches. Jimmy John's actually had this clause
Speaker 1: in all of its employment contracts with sandwich makers that
Speaker 1: they could not go to another sandwich maker, and Illinois
Speaker 1: and a couple other states thought this was pretty ridiculous.
Speaker 1: So like, if you work for Jimmy Johns, you're working
Speaker 1: a minimum wage or near minimum wage job, you couldn't
Speaker 1: go to Subway. Yes, it specifically said that you couldn't
Speaker 1: go to other places that make sandwiches, pedas it had
Speaker 1: all of these different things, like a restaurant that does
Speaker 1: the majority of its business making sandwiches, and so a
Speaker 1: bunch of state attorneys general sued over this. They got
Speaker 1: a settlement with Jimmy Jones Jimmy Johns agreed to stop
Speaker 1: putting these in their contracts, but then a couple of
Speaker 1: other state attorneys general like really took off with this.
Speaker 1: Washington State Attorney General brought dozens of cases against these,
Speaker 1: mostly involving things like baristas or cashiers at various different
Speaker 1: types of retail stores. So it quickly became apparent that
Speaker 1: these clauses are in a lot of contracts, and like
Speaker 1: the sort of contracts that you wouldn't think that they
Speaker 1: would be in because the original idea, of course, was
Speaker 1: to protect intellectual property or if a company trained you
Speaker 1: in something highly specific, you wouldn't want to then just
Speaker 1: turn around and give that same knowledge to another company.
Speaker 1: And so what was the basis of these suits that
Speaker 1: attorneys general we're bringing in? The FTC was looking what
Speaker 1: were they saying was wrong with him? Yeah, So a
Speaker 1: lot of states have laws on consumer protection that are
Speaker 1: actually very similar to the law that the FTC enforces.
Speaker 1: They're called mini ftccs, and they prohibit companies from engaging
Speaker 1: in unfair or deceptive business practices. And so a lot
Speaker 1: of these state ages were arguing that these clauses are
Speaker 1: clearly unfair. Often they're hidden in sort of like straight
Speaker 1: up contract language that a lot of people don't read
Speaker 1: and aren't even aware that these are in there until
Speaker 1: they try and take another job, and then whatever company says, actually,
Speaker 1: you can't leave because you sign this non compete. And
Speaker 1: so it's just a way of keeping employee is in
Speaker 1: a workplace where they otherwise might want to leave, and
Speaker 1: you make more money or get a better opportunity. Yes,
Speaker 1: And so the FTC started investigating or looking into non
Speaker 1: competes during the Trump administration. There was this big workshop
Speaker 1: that they held in the very beginning of twenty twenty,
Speaker 1: right before the pandemic, in which a lot of the
Speaker 1: state ages and sort of various academics who've studied noncompetes
Speaker 1: came and testified before the FTC about this practice. Since then,
Speaker 1: you know, they've been slowly building their research on this,
Speaker 1: and then they announced this non compete rule in January
Speaker 1: of this year. It was very interesting because, as I said,
Speaker 1: they've been telegraphing that they might be doing this for
Speaker 1: quite a while, but it still took a lot of
Speaker 1: businesses and groups by surprise that the FTC proposed such
Speaker 1: a broad rule because what they have proposed would outlaw
Speaker 1: non competes in almost all circumstances, with the exception of
Speaker 1: if you sell a business, they said it would be
Speaker 1: okay for the acquiring business to put a noncompete, because
Speaker 1: nobody really wants to buy a business and then have
Speaker 1: the found go out and start, you know, arrival the
Speaker 1: next day. Leah, can you tell us just a bit
Speaker 1: about the FTC itself? How does it work, who runs it,
Speaker 1: how do they do what they do? Sure? So, the
Speaker 1: FTC is a agency founded in nineteen fourteen, specifically because
Speaker 1: Congress was a little bit unhappy with how the Justice
Speaker 1: Department was enforcing the antitrust laws. So Congress had passed
Speaker 1: some antitrust laws in the late eighteen hundreds eighteen nineties
Speaker 1: focused on corporate power. Some of the really big companies
Speaker 1: at the time were like Standard Oil and the railroads,
Speaker 1: and Congress was really concerned about how much power those
Speaker 1: companies had over trade in the US. You know, the
Speaker 1: railroads obviously controlled a lot of agriculture and things that
Speaker 1: could go across the United States since that was the
Speaker 1: primary mode of transportation at the time. So they passed
Speaker 1: laws allowing the Department of Justice to bring cases against
Speaker 1: these companies, particularly what they felt were sort of unfair
Speaker 1: business practices. But they felt that the Justice Department wasn't
Speaker 1: moving fast enough, so in nineteen fourteen, they passed a
Speaker 1: new law, the FTC Act, creating the Federal Trade Commission,
Speaker 1: which is a five member agency. No more than three
Speaker 1: members can be of the same party, so it is
Speaker 1: supposed to be a bipartisan and it has authority to
Speaker 1: challenge a lot of business practices. They made the law
Speaker 1: creating the FTC specifically broader than the other antitrust laws
Speaker 1: that they had already passed. So the FTC has two
Speaker 1: main powers. The first one is to challenge unfair or
Speaker 1: deceptive business practices, and the second one is to challenge
Speaker 1: unfair methods of competition. So this non compete rule that
Speaker 1: they propose is one of the first times they have
Speaker 1: created a rule under this power to regulate unfair methods
Speaker 1: of competition. So who appoints these members of the FTC?
Speaker 1: So they have to be some Republicans, some Democrats. Yeah,
Speaker 1: the President selects the members of the FTC. They serve
Speaker 1: for seven year terms. By tradition, whenever there's a new president,
Speaker 1: they designate a chair. If the current chair is of
Speaker 1: the other party, that person steps down so that the
Speaker 1: president can name a new person to be the chair.
Speaker 1: So when President Biden was elected, the chair under Trump
Speaker 1: stepped down so that there was a vacancy, and then
Speaker 1: President Biden appointed Lena Khan. And she's been fairly activist
Speaker 1: in pursuing the kinds of things we're talking about here today. Yes,
Speaker 1: it was very surprising to people that he picked Lena
Speaker 1: Khan because she's very progressive. She's also very young. She's
Speaker 1: the youngest ever Federal Trade Commission chair. She had written
Speaker 1: as an academic about how the FTC has a lot
Speaker 1: of powers that it hasn't really utilized, and one of
Speaker 1: them that she was proposing is this ability to make
Speaker 1: rules designating what is unfair methods of competition. So do
Speaker 1: you see this thing where when a democratic president is
Speaker 1: in office, the FTC becomes more activist I'm looking at
Speaker 1: corporate when Republicans are in it becomes less so or
Speaker 1: do they generally always kind of pursue this mission. I
Speaker 1: would say they always sort of pursue this mission. It's
Speaker 1: a little bit more of like degrees of how serious
Speaker 1: they are because it is a five member commission. So
Speaker 1: one of the ideas is that the commission is supposed
Speaker 1: to work a little bit on a bipartisan basis, taking
Speaker 1: input from all five of the commissioners to sort of
Speaker 1: pick the direction. One thing that Lena Khan has done
Speaker 1: that's been a little bit different than previous Federal Trade
Speaker 1: Commission chairs is her FTC has been a little bit
Speaker 1: more partisan. So there have been a lot of three
Speaker 1: to two votes in the past. The FTC definitely tried
Speaker 1: to act on a more bipartisan basis and there were
Speaker 1: more five O votes than anything else. We're talking about
Speaker 1: this non compete action that they're taking. Where does it
Speaker 1: go from here? How long till we find out whether
Speaker 1: this rule banning these non competes actually it takes place. Yeah,
Speaker 1: So they are right now taking public comments on the proposal.
Speaker 1: It was going to be through the end of March.
Speaker 1: They just announced that they're extending in an additional thirty
Speaker 1: days so that people have more time to offer their
Speaker 1: comments because they have gotten a significant amount of pushback
Speaker 1: from a lot of business groups. The Chamber of Commerce
Speaker 1: is the primary one, but all sorts of other types
Speaker 1: of groups spoke at a public hearing that the FTC
Speaker 1: held about a month ago, and one of the main
Speaker 1: concerns that a lot of the companies have is, from
Speaker 1: their point of view, non competes are very useful, particularly
Speaker 1: for executives who have a lot of insight into business
Speaker 1: planning and corporate direction, and they're a little bit concerned
Speaker 1: that this rule would outlaw that kind of a noncompete.
Speaker 1: And as they were saying, you know, you really don't
Speaker 1: want the CEO of a company to quit and the
Speaker 1: next day go to its biggest rival, because then they're
Speaker 1: going to have a lot of trade secrets or corporate
Speaker 1: information that another individual might not have. So a lot
Speaker 1: of these companies and trade groups were really pressing the
Speaker 1: FTC to narrow the rule a little bit to make
Speaker 1: sure that that kind of a situation couldn't happen. But
Speaker 1: none of them are arguing that if you work at
Speaker 1: a fast food place that you shouldn't be allowed to
Speaker 1: take a job at another fast food place. Yeah, that
Speaker 1: was what was so interesting was everyone was like, yes,
Speaker 1: we agree that these non compete agreements have been abused
Speaker 1: and the FTC should absolutely go after these cases where
Speaker 1: there are abusive nine competes. But there are some situations
Speaker 1: where they're okay. The day before the FTC announced the
Speaker 1: noncompete rule, they announced three enforcement actions against various companies,
Speaker 1: one of which the sort of most egregious one was
Speaker 1: a company that required all of their security guards to
Speaker 1: sign a two year non compete that they could not
Speaker 1: work as a security guard for any other company within
Speaker 1: like one hundred and fifty miles. And that's sort of
Speaker 1: like what the FTCCS is like an abusive none compete.
Speaker 1: Do you think ultimately this is going to pass and
Speaker 1: these petza are going to go by the way, It's
Speaker 1: a little hard to say. I mean, they definitely have
Speaker 1: a lot of support from the administration. President Biden has
Speaker 1: said that one of the things that first made him
Speaker 1: interested in competition was learning about the ubiquity of these
Speaker 1: types of noncompetes. They are very common in particular industries
Speaker 1: like healthcare, like tech. Also hairdressers. There are a lot
Speaker 1: of hairdressers who are subject to noncompetes. And in fact,
Speaker 1: we're gonna hear from a hair stylist in just a
Speaker 1: couple of minutes, and that's sort of in the administration's view,
Speaker 1: those aren't really the situations where noncompetes are called for.
Speaker 1: So there's a lot of support within the administration for
Speaker 1: this rule, but there are a lot of legal questions
Speaker 1: about whether the FTC actually has the authority to propose
Speaker 1: a rule as broad, and whether under the law and
Speaker 1: it's existing authority, it can move forward with this. Yeah.
Speaker 1: I think here in Washington, a lot of people understand
Speaker 1: that this so called alphabet agencies, you know, the SEC
Speaker 1: and the FAA and here the FTC have a lot
Speaker 1: of power. But I think a lot of people would
Speaker 1: be surprised how much authority these agencies really have. Yeah.
Speaker 1: I think that was one of the things that Lena
Speaker 1: Khan has been very good at doing, is finding a
Speaker 1: lot of the powers that are actually within the FTCs
Speaker 1: statute and making the agency flex its muscles in ways
Speaker 1: that it really hasn't in the past. Leah and Ailand,
Speaker 1: thanks so much for talking with me. Thanks for having me.
Speaker 1: When we come back, we'll hear from someone who's run
Speaker 1: up against one of these non compete agreements. We've heard
Speaker 1: how people in all kinds of jobs are sometimes subject
Speaker 1: to these noncompete agreements. Producer Catherine Fink spoke to one
Speaker 1: of them, Jennifer Alvarez worked as a hair style list
Speaker 1: in Illinois and signed a noncompete with one employer. I
Speaker 1: worked at a salon, and I worked for the company
Speaker 1: for eleven years, and I did sign a noncompete when
Speaker 1: you are going to be departing from that employment. It
Speaker 1: was a non compete of four point one miles. Four
Speaker 1: miles in my particular area definitely was pushing me out
Speaker 1: of the territory where the majority of my customers were.
Speaker 1: There was a lot of salons as well, so I
Speaker 1: felt restricted as far as going to a different salon.
Speaker 1: I felt restricted in the sense that there was several
Speaker 1: times throughout my employment that I wanted to leave, and
Speaker 1: I wasn't certain financially what that would mean for me,
Speaker 1: giving that I was a commission employee too. I solely
Speaker 1: relied my customers to make money to be able to
Speaker 1: pay all my bills. So it's not like it was
Speaker 1: an hourly job where I just needed to show up
Speaker 1: and do the bare minimum. I had customers I had
Speaker 1: to take care of, and I took great pride in that.
Speaker 1: You know, I was pretty young when I started, and
Speaker 1: so most of us just didn't ask questions. We just
Speaker 1: all signed it. Because we felt like we had to.
Speaker 1: I wish that there would have been somebody to educate
Speaker 1: me at the time of like, you don't have to
Speaker 1: sign this, or I don't know if I didn't sign that,
Speaker 1: would they have said, oh, well, you can't work here.
Speaker 1: When I left, I didn't have an exit strategy and
Speaker 1: I basically just quit and I didn't have a plan
Speaker 1: of where to go. So I did reach out to
Speaker 1: two different lawyers and they both said, yes, this is
Speaker 1: going to be enforceable, don't even try to push it.
Speaker 1: So I ended up finding it salon suite that was
Speaker 1: probably about fifteen minutes away from the place that I
Speaker 1: worked at, and I basically had to rebuild my business
Speaker 1: all over again. Jennifer now owns her own hair salon,
Speaker 1: and she says because of her experience, she doesn't require
Speaker 1: her employees to sign noncompetes. You have to do things
Speaker 1: to protect your investment and to protect your business. And
Speaker 1: at the same time, I know how I felt with
Speaker 1: the non compete as if I was handcuffed to the business.
Speaker 1: And my thought process is, if you don't want to
Speaker 1: work here anymore, then leave the doors open for you,
Speaker 1: because I really want my team to love where they're
Speaker 1: working and enjoy coming to work every day, so I
Speaker 1: don't believe that we should have that inner business. At
Speaker 1: the same time, it would really suck if my team,
Speaker 1: you know, like if walkouts had happen to a lot
Speaker 1: of salon owners, and that it would be really unfortunate
Speaker 1: if they went right across the street. My entire team,
Speaker 1: with everything that I've trained and invested in them. But
Speaker 1: my motto is, I'm going to make this a no brainer.
Speaker 1: It would be absolutely ridiculous of you to leave because
Speaker 1: of what I offer. They're wanting flexible schedules, they want healthcare,
Speaker 1: they want education, they want support and coaching. So I
Speaker 1: offer those things to them and empower them to take
Speaker 1: ownership of their business because it is their business too.
Speaker 1: Let's hear a little more about how common experiences like
Speaker 1: these are and how Joe Biden has made workers rights
Speaker 1: in general a theme of his administration. Joe Constance on
Speaker 1: Bloomberg's Workshift team, Senior labor reporter Josh Idelson and Mario Parker,
Speaker 1: who leads Bloomberg White House and Politics coverage, are reporting
Speaker 1: on this question, and they're here with me now. Joe,
Speaker 1: I can see how a relatively small percentage of employees
Speaker 1: would be privy to trade secrets or receive expensive training
Speaker 1: at the workplace. That would be detrimental the company if
Speaker 1: they turned around and took it someplace else. But these
Speaker 1: agreements cover a lot of employees who don't have any
Speaker 1: of that exactly. So I think one of the interesting
Speaker 1: things here is that it applies to executives. It's pretty
Speaker 1: common for executives to sign these, about sixty to eighty percent.
Speaker 1: Typically we'll have one of these agreements in their contract.
Speaker 1: But it also applies to hourly workers in many cases. Josh,
Speaker 1: why have these agreements spread so far and wide so
Speaker 1: millions of workers are covered? According to studies by non competes,
Speaker 1: agreements from sandwich workers to warehouse workers have been covered
Speaker 1: by non competes, and advocates would argue this is not
Speaker 1: just about secrecy or confidentiality, it's about power because one
Speaker 1: of the ways that workers have leverage against their boss
Speaker 1: is to organize and take collective action that's often difficult
Speaker 1: to do at scale in the United States. Another form
Speaker 1: of leverage some workers have is the ability to quit
Speaker 1: and go work somewhere else, and especially go work somewhere
Speaker 1: else using the skills that you have, and so if
Speaker 1: a company can block the exits, then they have more
Speaker 1: power over those workers, whether it's about their pay or
Speaker 1: about issues with the workplace culture, harassment, discrimination, safety, workers
Speaker 1: who feel trapped, as a number of workers I've talked
Speaker 1: to said, they do have less leverage to take on
Speaker 1: issues in their workplace, and non competes are one of
Speaker 1: several facets of this effort by employers to restrict employee's
Speaker 1: ability to go elsewhere. Mario, these nine competes have been
Speaker 1: around for a long time. They've gone through many different
Speaker 1: presidential administrations. Joe Biden's Federal Trade Commission is now taking
Speaker 1: aim at them and a lot of other sorts of
Speaker 1: things that hinder worker ability to change jobs and seek
Speaker 1: new opportunities. Why is Biden going after this? Why is
Speaker 1: he making this a focus? The Biden administration is saying it, Look,
Speaker 1: the pendulum has swung way too far and these laws
Speaker 1: are now a hostile toward workers. There's a case where
Speaker 1: the FTC took action against the company that was imposing
Speaker 1: a non compete on security guards. Right to Josh's point,
Speaker 1: how that already hinders that certain workers mobility and ability
Speaker 1: to leverage their skills and get a higher pay. I
Speaker 1: think that's a classic case of what you see Biden
Speaker 1: siding those type of things where the pendulum swung way
Speaker 1: too far. I was asking some of the folks I
Speaker 1: was talking to some of these law professors and other experts,
Speaker 1: how did it get quite so common for these agreements
Speaker 1: to be so widespread? And I think one of the
Speaker 1: answers is just that it's really easy for companies to
Speaker 1: just put this clause in their employment contract, and you know,
Speaker 1: we have photocopiers, so it's really easy to kind of
Speaker 1: just duplicate over and over, and you know, there's no
Speaker 1: reason to really take it out. I think it benefits
Speaker 1: the employers as well, because it's a lot easier to
Speaker 1: enforce than other mechanisms, especially for those employees that they're
Speaker 1: actually worried will take you some sort of valuable information
Speaker 1: or perhaps client relationships over to a competitor. It's easier
Speaker 1: to stop them from leaving than it is to prove
Speaker 1: that they passed along this confidential information. There are a
Speaker 1: few downsides, so I think that's another reason why we've
Speaker 1: seen this proliferate quite so much. And as you said, Joe.
Speaker 1: It may not matter for the company if the agreement
Speaker 1: is not legally enforceable, because unless the company gets in
Speaker 1: trouble with an enforcer or with a judge, the worker
Speaker 1: may not want to test their luck in court. As
Speaker 1: one law professor said to me, generally workers are not lawyers,
Speaker 1: and so in the state of California, for example, non
Speaker 1: competes are often not legally enforceable. But that does not
Speaker 1: mean that companies don't impose them on workers, and it
Speaker 1: doesn't mean that workers don't choose to stay put because
Speaker 1: of the fear of testing that agreement. Our conversation continues
Speaker 1: after the break, Mario. The Biden administration and Democrats in
Speaker 1: Congress aren't just going after these noncompete agreements, but whole
Speaker 1: package of other workplace reforms, like nondisclosure agreements that say
Speaker 1: you can't talk about what happens to a work or
Speaker 1: agreements where you're forcing into arbitray with your company. If
Speaker 1: you have a disagreement, you can't sue. Both of those
Speaker 1: things have been outlawed in some circumstances by new laws.
Speaker 1: So there seems to be this pretty big push in
Speaker 1: Washington to tip some power back toward workers. Yeah, No, absolutely.
Speaker 1: I mean you're saying some of that particularly bubble up
Speaker 1: from the progressive wing of the Democratic Party, but also
Speaker 1: the centrist wing as well. I think that you have
Speaker 1: to take this in some of the contexts that we're
Speaker 1: in right now. Tight labor market. Biden a popular refrain
Speaker 1: of his presidency stump speeches that under him, workers have
Speaker 1: more power than they've had in years, and you're kind
Speaker 1: of seeing that in some ways to be fair play
Speaker 1: out both in Congress in terms of some of the
Speaker 1: actions that he's taking as will I would just note
Speaker 1: on nondisclosures and forced arbitration agreements, it's still only particular
Speaker 1: situations like sexual harassment where those practices have now been
Speaker 1: restricted by Congress and more unearly, companies do still have
Speaker 1: wide discretion to force workers into arbitration or to restrict
Speaker 1: them from talking about things that happened at work, and
Speaker 1: the boundaries of where exactly they can and can't do that,
Speaker 1: especially under federal labor law, are likely to be tested
Speaker 1: more over the next several years. Joe, do you see
Speaker 1: that these laws that outlaw nondisclosure agreements and force arbitration
Speaker 1: in the cases of sexual harassment are kind of like
Speaker 1: the narrow end of the wedge, and soon we're going
Speaker 1: to see that expanded to other forms of workplace mistreatment
Speaker 1: that is not going to stop just with sexual harassment. Yeah,
Speaker 1: I mean, I think with a lot of these issues,
Speaker 1: you kind of start with where you can get everyone
Speaker 1: on board and kind of where you can shore up
Speaker 1: the most support, and then I think you can work
Speaker 1: from there, and that might be kind of the mindset
Speaker 1: that they're working with. So yeah, it's quite possible that
Speaker 1: we might see more movement on that front. It will
Speaker 1: be interesting to see what Biden does and doesn't do
Speaker 1: now that there's a divided Congress with a Republican House already.
Speaker 1: Many of the moves that have drawn the most praise
Speaker 1: and attention from labor advocates under the Biden administration have
Speaker 1: not been legislative. They have been things like recording a
Speaker 1: video supporting workers right to organize as Amazon workers were
Speaker 1: about to vote on unionization, or on his very first
Speaker 1: day in office during his inauguration, firing the top prosecutor
Speaker 1: appointed by Donald Trump at the US Labor Board and
Speaker 1: later replacing him with Jennifer Abruzzo. Arguably the most aggressive
Speaker 1: progressive General Council, the National Labor Relations Board has had
Speaker 1: who has taken on a wide range of company practices
Speaker 1: and done more than most people expected to test the
Speaker 1: boundaries of what under ex sting law that agency can do.
Speaker 1: I do want to add that you have seen again
Speaker 1: with this divided Congress that we have now and Josh
Speaker 1: raised a point as to what Biden has left in
Speaker 1: the toolbox, and you're seeing him really use some of
Speaker 1: the tools that he has in his executive office the
Speaker 1: bullypool pit of the White House, with the nomination of
Speaker 1: Julie Sue recently to take over as Department of Labor
Speaker 1: Secretary for Marty Walsh, who has just recently left the administration.
Speaker 1: You're also saying some of the appointments on the National
Speaker 1: Labor Relations Board as well, Jennifer Bruzzo, as Josh mentioned,
Speaker 1: Gwen Wilcox and others who have these union pro union
Speaker 1: backgrounds as well. So that also sends a signal where
Speaker 1: he's kind of tilting at least the weight toward workers. Joe,
Speaker 1: people who argue for getting rid of these non competes
Speaker 1: say that if people are able to switch jobs, it'll
Speaker 1: also help them make more money. Is that actually borne
Speaker 1: out with data. Yeah, So there have been a few
Speaker 1: studies that have been done in situations where, you know,
Speaker 1: some states have passed laws that restrict these agreements. So
Speaker 1: there was one in Oregon where there were some restrictions,
Speaker 1: especially for lower wage workers, and the researchers found that
Speaker 1: right away there was more mobility for those workers when
Speaker 1: those agreements were banned, and those workers got about a
Speaker 1: two to three percent wage bump initially and then over
Speaker 1: time that grew to about five percent. And then in
Speaker 1: Hawaii they banned these agreements specifically for tech workers and
Speaker 1: they found that those workers got about a four percent
Speaker 1: wage bump. So you know, they're not getting twenty percent raises,
Speaker 1: but it's small, but it's substantial and significant, and especially
Speaker 1: across the economy, it could really make a huge impact.
Speaker 1: One management professor I talked to said, there are really
Speaker 1: two schools of thought about how to retain your employees,
Speaker 1: and one is to be nice to them and the
Speaker 1: other is to trap them in their jobs. And companies
Speaker 1: have a lot more power over workers if those workers
Speaker 1: don't see a realistic way to hop to another job
Speaker 1: doing the thing that they know how to do. And
Speaker 1: particularly in the US system where so many basic protections
Speaker 1: like health insurance are intimately tied to your job. It's
Speaker 1: a scary thing. And I think the other thing here
Speaker 1: is if the employer knows that you know, you don't
Speaker 1: really have any other options, you're kind of there for
Speaker 1: the foreseeable future. You know, they don't have that incentive
Speaker 1: to give you those nice things, to give you that
Speaker 1: pay bump to make sure that you stick around. And also,
Speaker 1: there has been plenty of research that shows that one
Speaker 1: of the most effective ways to get a raise is
Speaker 1: to jump jobs or at least have another offer to
Speaker 1: leverage with your current employers. So if you're not allowed
Speaker 1: to go anywhere else, you're not allowed to have a
Speaker 1: job offer in hand. It's really tough to see those games.
Speaker 1: Joe Constance, Josh Idolsen, Mario Parker, thanks for talking with me,
Speaker 1: Thanks so much for having us. Thank you, Thanks Wis,
Speaker 1: Thanks for listening to us here at the Big Take.
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