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In December 2022, I was made redundant. Citing financial challenges, my employer eliminated several roles across the company. I was ten months into leading the Marketing team and about to start my Christmas break.
It stung. Additionally, almost six months later, I’m still waiting out my non-compete.
It raises the question: When faced with an arbitrary set of restrictions, what becomes of the worker? And by its very definition, if redundant means not or no longer needed, how can a former employer exercise such control over an individual’s right to employment?
In this scenario, no one wins. Brands are deprived of talent, while professionals lose out on multiple fronts. For creative industries to thrive, we need to move on from antiquated hiring practices and allow the people behind the work to have access to opportunities without limitation.
The global picture
In January 2023, the U.S. Federal Trade Commission announced a notice of proposed rulemaking that would outright ban non-compete clauses from employment contracts. The agency suggests these measures stifle GDP growth, hamper innovation and impair entrepreneurial activity. Should the ban go ahead, it will take effect retroactively, impacting roughly one-fifth of workers in the U.S. who signed contracts contingent on accepting a non-compete. The FTC claims the withdrawal of non-competes could increase wages by $300 billion per year.
This follows a similar consultation launched back in December 2020 by the U.K. government’s Department for Business, Energy and Industrial Strategy. The call for evidence set out to gather feedback on two motions; to make non-compete clauses enforceable only when the employer provides compensation during the term of the clause and to make post-termination non-compete clauses unenforceable.
Following the consultation, the U.K. government announced a plan to limit non-compete clauses’ duration to three months. A timeline for when this comes into effect is currently unknown.
The picture varies dramatically across labor markets. In Chile, India, Mexico and Vietnam, post-employment non-competes are void. Countries like Poland, France and Germany mandate a proportion of the terminated employee’s salary be paid through the non-compete period.