Come September, U.S. workers will no longer be subject to noncompete clauses that keep them from working for rival companies.
Federal Trade Commission chair Lina Khan visited Connecticut on Friday to talk about the new rules.
Khan, who met with workers and lawmakers at the Building Service Workers Union (32BJ SEIU) in Hartford, said noncompetes keep wages low and suppress new ideas.
“We're talking fast food workers, security guards, janitors, gardeners, journalists, health care workers,” Khan said. “And after we proposed our rule to ban noncompetes, we actually heard from 26,000 people across the country, from every state, from every walk of life. 25,000 of those comments supported our ban.”
Eighteen percent of the U.S. workforce is covered by noncompete clauses, according to the FTC.
Stacey Taylor, president of the Connecticut State Medical Society, said the agreements have hurt her patients.
“I was working with one large health care organization and because of a noncompete, had to relocate, not relocate my house, but drive much further to work at another location that most of my patients could not get to,” Taylor said. “Many of them have not seen a primary care provider since I left, because there are none."
U.S. Sen. Chris Murphy (D-CT) said the new law is expected to raise wages in Connecticut by more than $900 million annually.
“What we see here in Connecticut is that it's home care workers that have noncompetes, it's nurses that have noncompetes applied to them, in some cases, it's sandwich shop clerks that have noncompetes. And in those cases, it is simply being used as an effort to restrain the fluidity of the labor market,” Murphy said.
“The only reason that you apply a noncompete to a low wage entry-level worker is so that you can bind them to that job, and stifle the ability of the market to work properly, whereby workers get to bargain for higher wages, because if you don't pay them what they deserve, they're gonna go someplace else. So you don't let them go someplace else, then as an employer, as an economy, you can better keep wages down,” he said.
The law has been challenged in Texas federal court by the U.S. Chamber of Commerce. A decision is expected mid-summer.
“We've filed our briefs, and we think we're on very solid ground; if courts follow the law, follow what the FTC Act says, we think we should prevail,” Khan said.