CHARLOTTE, N.C. — If there’s anyone that loves her job, it’s Ti’Rena Riley.


What You Need To Know

The FTC announced a notice of proposed rulemaking to ban noncompetes

This means companies can’t sign workers to a noncompete clause, and it would also dissolve existing noncompete agreements

The public comment period is open through March 10


She’s an educational leader with Paul Mitchell, a cosmetology school.

This school is special to her because she also graduated from there.

As she walks down the rows of chairs and passing students as they practice, you can see her excitement for teaching the next generation of cosmetologists.

“I love to educate. I love to teach, that’s my passion, that’s my drive,” she said.

But before coming back as a teacher, she worked at salons.

One of those salons is where she had a noncompete, which she said lasted a year.

“Restrictions more so where the radius of where I could work at if I left, so like the distance, the radius of the mileage of where that next salon may be, taking certain type of clientele with me as well,” she said.

Noncompetes are the subject of debate right now, as the Federal Trade Commission proposed just last week to ban them.

In a notice of proposed rulemaking, the FTC says the new rule would make it illegal for employers to sign workers to a noncompete, and it would also dissolve existing noncompete agreements. 

The proposed rule would apply to independent contractors and anyone who works for an employer, whether paid or unpaid, according to the proposal.

“Research shows that employers’ use of noncompetes to restrict workers’ mobility significantly suppresses workers’ wages — even for those not subject to noncompetes, or subject to noncompetes that are unenforceable under state law," said Elizabeth Wilkins, director of the Office of Policy Planning in a press release. “The proposed rule would ensure that employers can’t exploit their outsized bargaining power to limit workers’ opportunities and stifle competition.”

Riley said her students are wary of noncompetes, a clause sometimes found in contracts for hair stylists.

“They don’t wanna go because they don’t wanna be tied down to a certain place for a certain amount of years,” she said. "And then getting hit or sued for it later down the line."

The FTC says 30 million U.S. workers are covered by a noncompete.

Carol Brooke, a senior staff attorney with the North Carolina Justice Center, says noncompetes can harm people who earn a lower wage.

"I absolutely think that people who make low wages are very adversely impacted by noncompetes agreements right now. These are folks who may not have their own transportation for example, who may not have the training to move from one type of job to another or the educational background,” Brooke said. “They are going to be constrained by all of those things when they're looking for other jobs. And if they are limited by a noncompete in terms of geography or type of industry, that has a major impact on them."

The FTC estimates banning noncompetes may increase workers’ earnings by nearly $300 billion.

Brooke says if the ban is lifted, it could have positive impacts for workers.

“I think that it will allow workers the ability to look for circumstances that are better for them, and whether that be pay, whether that just be a better work environment, whether that be better benefits, something closer to home, there’s all sort of things that people look at,” Brooke said.

FTC Commissioner Christine Wilson doesn’t support the rule proposal. 

"The proposed Non-Compete Clause Rule represents a radical departure from hundreds of years of legal precedent that employs a fact-specific inquiry into whether a non-compete clause is unreasonable in duration and scope, given the business justification for the restriction,” Wilson said in a statement.

Lance White, an attorney and partner at Apollo Sports and Entertainment Law Group, says he works with clients who use noncompetes.

He says companies will use noncompetes to protect their trade secrets.

"A lot of our clients are really concerned about the intellectual property aspect of it. And there’s certainly other aspects, but the intellectual property is the main one that they’re focused on, and it’s really their trade secrets, because in today’s information economy, the need to protect your intellectual property, your confidential proprietary information is becoming more and more essential,” he said.

White says he’s advised his clients on other tools they can use if the ban goes through.

"The main one is a confidentiality agreement and nondisclosure agreement. It essentially says that, look these are our trade secrets. These are our processes. These are our formulas and it really sets forth how you can and cannot use that trade secret and mainly it’s that you can only use it for the employer,” White said.

Nondisclosure agreements and other customer nonsolicitation agreements would not be subject to the proposed rule because these covenants don’t prevent a worker from seeking or accepting employment, according to the proposal.

However, the proposed rule does say that such covenants would be considered noncompete clauses where they are so unusually broad in scope that they function as a noncompete.

"The question the employer has to ask themselves and the question we have to ask ourselves is are we restricting the employee’s ability to work for another company,” White said. “Because if we are only limiting the employees' ability to use our confidential proprietary information, the trade secrets, that does not amount to a de facto noncompete. It really hinges upon are we restricting this particular employee from working with another employee.”

The FTC is currently seeking public comment on the rule.

As workers wait to see what happens, Riley says she hopes a ban opens the door to more opportunity for workers.

"I feel like if they were to ban it, I do think that'll take us in a better direction,” she said. "Not saying that they should take, have no contracts, but maybe with salons opening up a nondisclosure agreement verses a noncompete."

The comment period is open through March 10.

You can submit a comment here.