Non-Competition Agreements that are signed by workers to protect the assets and customers lists of the companies that employ them, were banned by the Federal Trade Commission (FTC) last May. In a 3-2 ruling, the Commission said that the agreements were an unfair restraint on trade that violated US Antitrust Laws while suppressing worker’s wages and mobility.
About 30M workers have signed these agreements according to the FTC and US District Judge Ada Brown struck down the ban on August 20th.
Her ruling said that the FTC does not have the authority to ban any practices it deems unfair. Judge Brown further stated that even if the Commission had the authority in the first place, that it hadn’t justified banning virtually all non-compete agreements.
“The Commission’s lack of evidence as to why they chose to impose such a sweeping prohibition … instead of targeting specific, harmful non-competes, renders the rule arbitrary and capricious,” wrote Judge Brown.
This was a big win for the US Chamber of Commerce that initiated the action. Suzanne Clark, CEO of the Chamber, said, “This decision is a significant win in the Chamber’s fight against government micromanagement of business decisions.”
I’m certainly not an attorney. I don’t even play one on TV so please confirm anything I’m saying with the mouthpiece of your choice. But don’t you think that companies should have the right to protect the assets they’ve worked hard for and spent money to develop?
We can only hope that this sort of governmental overreach will end in the future, but I’m sure we all doubt that it will.
Let me leave you with this…
Vice President Harris’ Campaign has announced that this afternoon the candidate will propose increasing the tax deduction for new business startups from $5,000 to $50,000. The campaign has said that this ten-fold increase in the deduction will, in and of itself, create 25M new businesses.
The deduction to which they refer was initially for the basic costs incurred to begin an enterprise such as legal and incorporation fees. Prior to this deduction, these fees were supposed to be amortized over several years.
This new deduction would also include marketing surveys, advertisements, and salaries for workers. There’s only two problems that I see.
Aren’t the expenses that would now be included in the deduction already deductible? Of course they are. Since when would marketing, advertising, and salaries not be deductible on a US Income Tax Return?
The other problem is that startups generally don’t pay income taxes in the first place. It normally takes a couple of years for these companies to turn a profit where they would need to pay Uncle Sam.
Before I start getting a bunch of hate emails from people supporting one candidate or another, please realize that I’m not playing politics here. I’m not trying to tell you who to vote for or against.
But being the born and bred Chicagoan I happen to be, I just love it when a politician promotes a tax deduction that either won’t work, or won’t reduce taxes in the first place. A lot of what I try to do with this column is to inform entrepreneurs about taxation changes, and how they’ll actually be affected.
We’ll see if this one goes anywhere.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Sincerely yours,
Chris Amundson
President
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