Philadelphia tree trimmers fail to nip FTC noncompete ban in the bud The Federal Trade Commission's ban on noncompete agreements has been upheld after a second legal challenge, with a Philadelphia judge deciding that the FTC was well within its legal authority to prohibit such contract clauses. The case between the FTC and ATS Tree Services, a small company located in a Philly suburb, is the …
If I'm not being paid by you, you no longer get to say what I do with my time. I'm not going to reveal any company secrets but you will not bar me from working if I don't have a severance package or something to compensate me for this.
And a 12 person tree trimming business? Really? I wouldn't expect them to have a clause like this and especially not go to court over it.
Uh, yeah, it says so right in TFA: "attorney Josh Robbins of libertarian law group Pacific Legal Foundation and representative for ATS".
PLF is running this one. ("Bankrolling" isn't quite accurate, as PLF apparently work pro bono.)
PLF is kind of a mixed bag; they've fought some cases that probably many here would agree with. I don't particularly care for the label "libertarian" — PLF was founded in the 1970s and they're a classical liberal organization, in the political-science (i.e. correct) sense of "liberal". In Palazzo, for example, they convinced SCOTUS to rule that you can sue under the Takings clause even if the law authorizing the "taking" in question was passed before you acquired the property; that basically means you don't have to know every single applicable law before you buy. I think that was a good decision and worth fighting for. They've also defended homeowners against "home equity theft", which is a blatant money grab by local tax authorities, in a number of states.
In this case my sympathies are with the FTC, but I wouldn't lump PLF in with the Heritage Foundation and that sort, either.
I've found that "libertarian" usually translates to "those regulations I like and no others". So they'll probably argue here that they don't want people to lose the right to choose whether to accept a non-compete contract, a choice that should come with a compensatory increase in wages. The argument doesn't make a lot of sense in context, but if you find someone and get them to answer, I can pretty much guarantee that's what you'll hear. If you find someone who says they're a libertarian, however, there's a good chance they'll completely disagree with these guys on what is fair and what should be done to make that happen. That's why I don't call myself a libertarian; there are too many people who are using the term who I disagree with and using it would only confuse everything.
"Libertarian" was the wrong adjective here. See my post above about the PLF.
In a non-compete clause employees agree (contractually) to encumber some of their rights in exchange for a job. In ruling non-competes illegal, the FTC essentially said those rights are inalienable — that is, employees cannot agree to encumber them. It's a classic liberal (in the correct, political-science sense) position that generally most individual rights are not inalienable and so can be contracted.
So the PLF is taking a coherent liberal position here.
I'd rather see the FTC win myself; I don't see any compelling reason to allow non-competes. But the PLF is not being ideologically inconsistent.
The the best of my knowledge, in California, you can be required to sign a non-compete contract, but the company can't enforce that if you leave. So...it's functionally illegal. If that works in California, I can't see why it'd actually be an issue anywhere in the US.
"can't enforce" is tricky. The company can still sue you — anyone can file suit over anything — and if the court doesn't dismiss it immediately, you're looking at significant expense and stress. So even an "unenforceable" contract can in practice have a strong chilling effect.
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