June 4, 2024

Terrific Tuesday: The Best Day for Workers in a Decade!

Category: Uncategorized

Author: Matthew T. Hurm, Esq.

Workers secured two massive victories on Tuesday, April 23, 2024, with the Federal Trade Commission successfully voting to ban non-compete agreements, and simultaneously, the U.S. Department of Labor greatly expanded the number of salaried workers who are eligible for overtime.

The Impact of Non-Compete Agreements

The Federal Trade Commission estimates that 18% of the U.S. working population, or roughly 30 million workers, were bound by non-compete agreements. For decades, U.S. corporations have been allowed to force their employees, upon threat of termination, to sign non-compete agreements that promise the employing corporations that their employees won’t work for a competitor. These agreements have greatly harmed workers over the decades, as many employees have been fired by their employers and found themselves unable to apply to similar jobs in their area of expertise because of these pernicious non-compete agreements.

Back in January 2023, the Federal Trade Commission first proposed the ban on non-compete agreements, and the proposal was met with a flood of support. Of the 26,000 public comments received by the Federal Trade Commission, 25,000 supported the ban. This outpouring of support showed the impact of these anti-competitive agreements on workers’ lives.

Legal Challenges and Political Implications

In addition to the Federal Trade Commission’s new rule, the National Labor Relations Board has been actively litigating against employers that try to bind their employees to non-competes and similarly anti-competitive agreements like training repayment plans and overly broad non-solicitation agreements.

The Federal Trade Commission’s new rule will unquestionably be challenged in Court. The U.S. Chamber of Commerce has already promised to attempt to block this ban so that its members can continue to stop workers from making a living in the career of their choice. Whether this ban survives rests heavily on the 2024 election as Trump officials have promised a swift reversal and a return for non-compete agreements. In 2016, Trump’s own campaign volunteer agreement included a non-compete provision.

Expansion of Overtime Eligibility

Also on Tuesday, April 23, 2024, the U.S. Department of Labor passed a rule revising overtime laws affecting over 4 million Americans. Prior to this rule, only workers paid a salary of $35,568 or less were paid overtime. As of July 1, 2024, salaried workers making less than $43,888.00 must be paid overtime. And starting on January 1, 2025, salaried workers making less than $58,656 are to be paid overtime.

Economic Impact and Future Uncertainty

The largest share of workers who will see changes are in “professional and business services, health care and social services, and financial activities,” according to the Economic Policy Institute. The U.S. Department of Labor forecasts that the policy change will generate about $803 million in more pay to workers during the first 10 years of its implementation.

Similar to the non-compete ban, the 2024 election will have a large bearing on whether this rule will be put into effect or reversed. Trump supported the original $35,568 threshold for overtime and has not voiced any support for the U.S. Department of Labor’s increase. Time will tell if this Terrific Tuesday will remain upheld or whether we will revert to the harder times for workers.

Need Legal Advice?

If you or someone you know is bound by a non-compete agreement or a salaried employee and has any questions about these changes to the law, please do not hesitate to contact the Hurm Law Firm for a free consultation at (216) 860-1922.

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