The headline picks itself — The Federal Trade Commission (FTC) has voted to ban nearly all noncompete agreements, which typically prevent workers from joining competing businesses or starting their own. FTC Chair Lina Khan cited stories of workers being trapped in abusive workplaces due to noncompetes. Effective later this year, the ban excludes existing agreements for senior executives. The FTC estimates that the policy change could increase wages by nearly $300 billion annually.
The ban does not apply to existing agreements for senior executives, but companies cannot enter into or enforce new agreements.
Conservative lawyer Eugene Scalia has already sued the FTC over the ban, aiming to have the rule struck down. The case will likely be appealed and potentially reach the Supreme Court. The U.S. Chamber of Commerce also opposes the ban, arguing that noncompetes protect trade secrets and incentivize employer investment in training.
And I want to cover a couple of others while on the topic.
The National Institute of Standards and Technology (NIST) has updated its digital identity guidelines, clarifying the use of “syncable authenticators” for stronger multi-factor authentication. The supplement addresses the lack of support for synced passkeys in the current guidelines and aims to help agencies improve authentication to online services. The update could pave the way for agencies to adopt password-less authentication methods endorsed by the FIDO Alliance. The new supplement is expected to remove barriers to adoption and facilitate phishing-resistant multifactor authentication in the U.S. government.
Small Business Trends is reporting that there is growing concern among recipients of Payment Protection Program (PPP) Loans about potential audits, as up to one-third of the loans have shown signs of possible fraud. The Small Business Association (SBA) can audit borrowers’ compliance with eligibility and usage requirements. Businesses that used at least 60% of their loan for payroll expenses may be eligible for loan forgiveness. Delinquent loans are being referred to the Treasury Department for collection. If audited, borrowers will receive notice from their lender and should start compiling requested documentation to avoid delays.
The Justice Department’s National Institute of Justice seeks public input on using artificial intelligence in the criminal justice system. This request for feedback is part of President Joe Biden’s efforts to strengthen AI and civil rights. The report will address various aspects of AI in the criminal justice system and recommend best practices and additional actions. Comments are due within 30 days of the document’s publication.
I’ll circle back after it happens, but today, the Federal Communications Commission (FCC) is expected to vote to restore net neutrality by reclassifying internet service providers (ISPs) as common carriers under Title II of the Communications Act.
Why do we care?
The headline is non-competes. I’m no lawyer, so I won’t predict how that will play out. I will say that as a business owner, I wouldn’t be pushing these on employees now. They’re generally considered difficult to enforce, so why not make this a benefit? Flip the script and make it a positive.
I also wanted to highlight the PPP concerns. One should have expected that the program would have some audit teeth. It was never entirely free money. It was a government program, and that would come with paperwork.
