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Federal Trade Commission rules most noncompetes to be unlawful soon

One Tucson business owner weighs in
Posted at 11:12 AM, Apr 25, 2024

TUCSON, Ariz. (KGUN) — Derek Dooley owns Tucson Tattoo on Grant and Oracle. He’s been tattooing for years, and left his first tattoo shop under a noncompete agreement.

It’s an agreement between an employer and employee in a contract that prevents a worker from taking on a new job or starting a business oftentimes within a certain time frame after they leave a job.

“I just wasn’t making enough money where I was at and so I had another opportunity,” Dooley said.

Now that Dooley owns his own shop, he doesn’t make his employees sign noncompetes.

“If somebody’s unhappy and they want to go somewhere else, I’m not going to try and keep them,” he said.

RELATED: FTC votes to ban 'noncompete' agreements for most employees

Dooley said he doesn’t know anybody with a noncompete in the tattoo industry, so he said the recent Federal Trade Commission ruling might not make a difference because Arizona is a right to work state.

“I’ve never known anybody to be litigated for leaving anywhere that had a no-compete,” he said.

In an effort to promote competition, the FTC ruled that noncompetes will soon be banned nationwide. They said the final rule is going to be effective 120 days after publication in the Federal Register.

They said senior executives can still be employed under one, but employers cannot make them or any other employees sign a new one.

The FTC said the ban is going to create more than 8,500 new businesses that are going to be started each year. They said about one in five Americans have a noncompete, which they said is about 30 million Americans.

“This rule would give employees an opportunity to go leave a job where they’re not happy,” Ivelisse Bonilla said.

She is an employment law attorney in Tucson at Awerkamp, Bonilla, and Giles. She said under the new ruling employers could still use a non-solicitation agreement to protect confidential information.

“You say yes you can go compete, but don’t go after my clients for a specific period of time,” she said.

However, the U.S. Chamber of Commerce is suing the FTC over the ban, hoping it will be overturned.

“Why would you want to keep somebody with you that didn’t want to work for you?” Dooley said.

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Andrew Christiansen is a reporter for KGUN 9. Before joining the team, Andrew reported in Corpus Christi, Texas for KRIS6 News, Action 10 News and guest reported in Spanish for Telemundo Corpus Christi. Share your story ideas with Andrew by emailing andrew.christiansen@kgun9.com or by connecting on Facebook, or Twitter.