FTC takes legal action against companies whose workers are signing non-compete restrictions

For the first time in history, the Federal Trade Commission has taken legal action on multiple companies and individuals as they had thrusted illegal non-compete restraints on workers.

Companies like Prudential Command Inc., Prudential Securities Inc., and their owners Matthew Keywell and Greg Wier. Even packaging and glass companies like Ardagh Group S.A. and O-I Glass Inc.

Restrictions like low-wage security guards, engineers, manufacturing workers, and glass plant employees are a few non-compete restrictions that these companies and individuals imposed, as per the FTC revealed in a news conference.

Representatives for O-I and Prudential companies, a subsidiary of Titan Securities Groups, dismissed imposing these restrictions on security officers.

Per the FTC, workers were prohibited from looking for and accepting jobs with competing companies after resigning.

As a result, these restrictions hampered workers and competing companies, leading to lower salaries and wages, unfavorable working conditions, and reduced benefits, the FTC continued.

Further, read on steps taken by the FTC.

Further continuing, the FTC criticized Michigan-based companies; Prudential “exploited their superior bargaining power against low-wage security guards.”

Prudential signed mandatory contracts with the workers preventing them from applying for jobs in similar industries within a hundred miles of their workplace for two years after resigning, FTC further criticized.

The company also included a clause that if the employees violated it, they were compelled to pay $100,000. Prudential workers generally earned a minimum pay, or close to it, the FTC continued.

Claims that Prudential attempted to sue specific employees and rival security guard businesses and prevent people from obtaining positions at much greater earnings are also mentioned.

As per the court of Michigan State, the restrictions imposed by the company were “unreasonable and unenforceable under state law,” yet the company made it mandatory for the security guards and employees to sign them.

The FTC ordered Prudential to discontinue enforcing such non-compete rules and regulations on the relevant employees and future employees as it conflicted with the FTC Act and was unfair.

“Titan does not and has never imposed non-compete restrictions on its security officers,” as per the marketing manager with Titan Security Group, Stephen Johnson, owning the Prudential companies involved.

“We applaud the FTC’s efforts to halt unlawful non-compete restrictions and to protect workers,” Johnson clarified.

‘Freedom to pursue greater pay.’

O-I Glass also faced accusations from the FTC regarding non-compete restrictions imposed on employees that restricted them from either being involved with a similar industry or owning them for one year after resigning from the company.

However, the employees needed to seek written consent from O-I Glass if the employees were involved in similar business one year after resigning.

As a result, more than 1,000 O-I Glass employees suffered due to restrictions when the FTC initiated the investigation, the agency stated.

A representative for O-I refrained from commenting on the FTC claims.

Deputy Director of the FTC’s Bureau of Competition, Rahul Rao, stated in the news release that “the FTC is committed to ensuring that workers have the freedom to seek higher wages and better working conditions without unfair restrictions by employers.”

The FTC took additional steps to eliminate unfair restrictions.

This week, the FTC suggested a rule that restrains imposing non-compete terms and conditions on the workers of U.S. businesses.

If the suggestion gets approval, it would be challenging for employers to restrict the employees from joining competitors after they resign from the company.

As per President Joe Biden, the FTC’s proposal is “a huge step forward in banning non-compete agreements designed simply to lower people’s wages.”

“These agreements block millions of retail workers, construction workers, and other working folks from taking better jobs and getting better pay and benefits in the same field,” he stated.

- Published By Team Nation Press News