For years, one of the most controversial topics in wrestling has been talent having a non-compete clause in their contract. WWE is most known to have 30 to 90 days compete clauses in their talent contracts to avoid situations where the former stars can immediately find employment. However, a new ruling from the Federal Trade Commission may change that in the future.
When United States President Joe Biden got into office, one of his goals was to combat non-compete clauses. He signed an executive order on July 9, 2021, for the FTC to oppose these agreements and other provisions that negatively impact employers.
UPI’s Joe Fisher reported on January 5, 2023, that FTC Commissioner and Chair Lina Khan proposed a new rule banning employers from enforcing non-compete clauses.
Last year, Biden also spoke about his issues with non-compete clauses in his State of the Union.
He believes that employers should have to pay their workers their worth.
“…For too long, workers have been getting stiffed, but not anymore. We’re beginning to restore the dignity of work,” said President Biden.
He noted that in 2021, he discovered that 30 million workers must sign non-compete agreements to be employed. President Biden confirmed that he was continuing to challenge these issues and was committed to banning non-compete clauses.
President Biden continued, “…We are banning those agreements(non-compete clauses) so that companies have to compete for workers and pay them what they are worth.”
Today, the FTC has finally approved banning the non-compete clause that could affect the workforce, including the wrestling business.
FTC Voting In Favor Of Banning Non-Compete Clauses
Huffpost’s Dave Jamieson reported that the FTC voted 3-2 to ban non-compete agreements in employer contracts. It’s noted that three FTC Democrats voted for it, while two Republicans were against it. This expectation is that prohibiting the non-compete clause will lead to more leverage for workers in the job field.
The Hill’s Taylor Giorno also reported on the historic vote and shared that it can go into effect in 120 days. However, business groups are expected to oppose the ruling to prevent it from going into effect.
“Business groups say noncompete agreements are critical for protecting proprietary information and intellectual property, although the rule would not ban other methods for protecting that information, including nondisclosure and confidentiality agreements. They also question the agency’s authority to issue the blanket, retroactive ban,” the report said.
While it’s unclear if the ruling will change, this presents significant ramifications for wrestling contracts if passed.
How This Can Affect The Wrestling Industry
If the ruling is passed and non-compete clauses are prohibited, it could change the wrestling business. Most companies like WWE or TNA Wrestling argue that their superstars are independent contractors. However, the FTC’s ruling would also prevent them from enforcing non-compete clauses.
The ruling going through allows signed talent more negotiating leverage in reaching deals with companies, continuing to pursue career after being fired, and possibly preventing releases before contracts expire.
WWE recently released several talents, including Jinder Mahal and Cameron Grimes. They cannot sign or compete for another promotion for 90 days. If the ruling goes through in 120 days, this will help other future potentially released talent from dealing with the same issues that have plagued the wrestling business.
It also could prevent companies from firing talent from their contract early to avoid competition. This could be both negative and positive, as talent may be able to stay under contract and have more opportunities to avoid being let go. However, a company may hesitate to oblige talent looking to explore options until their term is finished.
The next few months will be interesting, as the FTC ruling may change the wrestling business forever.