ST. LOUIS — When the Federal Trade Commission decided in April to finalize a rule that would in the workplace, nobody cheered louder than Jeff Lohse.
The rule, scheduled to take effect in August, would free millions of American workers from contracts that stop them from switching jobs in their fields of expertise. But as important as it is to the cause of worker freedom, it is too late to help Lohse.
A couple of months before the FTC issued the new rule, Lohse lost his legal dispute with a former employer. The dispute started during the COVID-19 pandemic. Lohse worked as a sales manager for Logic Systems Sound and Lighting, a company that did audio and visual work for concerts and other big events. The event business dried up during the pandemic.
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After Lohse went on unemployment for a couple of weeks, a competing company, Klance Unlimited, offered him a job. Lohse took it. At the time, he didn’t know he had a noncompete clause. That changed three days into his new job, when Logic Systems informed Klance that Lohse couldn’t work for them.
Lohse quit and found a new job, but then his former employer tried to enforce the noncompete again. Lohse sued to try to get a judge to declare the contract invalid.
It didn’t work.
Earlier this year, Lohse lost his legal battle and had to pay “damages†of $2,371 to his former employer. That’s not the part that really hurt, though. It’s that the noncompete contract required him to also pay the attorney fees of his former employer. That bill, according to court records, was more than $40,000.
I first wrote about Lohse’s situation early last year, after President Joe Biden praised the FTC for starting the rule-making process. He suggested that by hurting workers’ freedom to switch jobs, noncompete clauses are bad for the economy.
“For decades, I’ve fought for the notion that if your employer wants to keep you, they need to make it worth your while with good pay and benefits,†Biden said in a tweet after the FTC announced its proposed rule. “Today’s FTC announcement to limit non-compete agreements is a huge win for workers.â€
What happened to Lohse happened to millions of Americans during the pandemic. Their companies shut down. They couldn’t work. But those who were under the control of a noncompete contract had a much harder time getting back to work.
“I was just trying to get by, to make a living,†Lohse says.
The new rule is “great for everybody else,†he says. “I hope nobody else has to go through what I went through these past three years.â€
That’s still an open question.
The day after the FTC approved the new rule in a 3-2 vote, the U.S. Chamber of Commerce and other business groups seeking to stop it. Like so many other things in this country, the rule is caught up in politics. It was approved by three Democrats and opposed by two Republicans. The Chamber of Commerce filed its lawsuit in Texas, where it will likely end up before a judge appointed by former President Donald Trump. It will take a while for the courts to wade through the legal issues, so don’t go tossing your noncompete into the trash just yet.
Lohse hopes the rule eventually becomes the law of the land. The way he sees things, there are hardly any secrets anymore, with nearly everything available on the internet. Workers ought to have the freedom to move to the jobs of their choice, without a former employer making it harder to earn a living.
Lohse is back at Klance, spending much of his time working on staging at university graduation ceremonies. The noncompete from his former employer has expired. He’s glad to be working again and free from the shackles of a corporate document that tells him how he can make a living.
Lohse has his freedom. The verdict for 30 million other American workers awaits.