The U.S. Federal Trade Commission has published a final rule that bans non-compete clauses in contracts.
In a press release announcing the rule, FTC Chair Lina M. Khan said: “Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism.”
“The FTC’s final rule to ban non-competes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”
Employers in the U.S. have often required employees to sign non-compete clauses in contracts. These clauses require employees to agree not to work for or start a competing company for a set period of time after leaving their jobs.
California, Minnesota, Oklahoma, and North Dakota are the only states that have banned these agreements. Now, the FTC is ensuring workers nationwide are protected.
Why are non-competes relevant to creators?
Non-compete clauses impact workers from all corners of the creator economy. This includes those working in video games, journalists, video editors, and even influencers.
In a LinkedIn article, lawyer Julian Sarafian added that non-compete clauses can also spell trouble for creators entering into a brand deal. In the past, he has even seen clauses attempting to prohibit influencers from creating content in general.
“‘You can never work in content creation again.’ That’s a term under a non-compete clause that I’ve seen proposed to a content creator whose livelihood depends on future brand deals,” he wrote.
“Brands love non-compete clauses that prevent creators from working for competitors. Left unchecked, brand deal terms can be ruinous for a content creator’s career.”
