💼 Noncompete battle lines

Plus: Wall Street's vibes | Friday, January 20, 2023

Open in app View in browser   Presented By Circle   Axios Markets By Emily Peck and Matt Phillips · Jan 20, 2023 Friday! Huzzah! We're a bit late to your inbox today, due to a technical issue on our end. Sorry about that. Now, let's get to it. 🚨 Situational awareness: Crypto lender Genesis filed for bankruptcy late yesterday. Not a great sign for the hundreds of thousands of folks who have money stuck with the company's partner, Gemini. Many have emailed their stories to us. Stay tuned for more. Today's newsletter is 889 words, 3.5 minutes.     1 big thing: Workers rail against "un-American" noncompetes Illustration: Sarah Grillo/Axios   Since the Federal Trade Commission proposed banning employers from using noncompete agreements just over two weeks ago, more than 4,400 comments have rolled in from the public on the government's website, Emily writes. Why it matters: It's likely the FTC's ban will get watered down, delayed, or even tossed out in court. Yet the proposal has revealed deep dissatisfaction with noncompetes among American workers, and some employers are taking notice. Regardless of where the ban lands, some companies are starting to think about noncompetes differently, with some looking at alternative strategies, said Mike Schmidt, a partner at Cozen O'Connor. There's "growing hostility to the idea that there should be those kinds of restrictions, and it's changing the environment that employers have been comfortable with in the last number of years," an employment lawyer told the Wall Street Journal earlier this week. What they're saying: Axios read through many comments on the government website: We found just one opposing the ban, which would prohibit companies from requiring employees to sign away their right to work for competitors in a certain industry for a period of time. "There is something distinctly un-American about baring individuals from liberty and the pursuit of happiness by limiting economic opportunities to whatever company a person happens to work for at the time," reads one comment. Others called these agreements "unjust" and "unfair." Of note: In the comments and interviews with Axios, doctors, in particular, say noncompetes hurt their careers and their patients; plus, they're fueling the current physician labor shortage. Meanwhile: In recent years, more states have moved to restrict the use of noncompete agreements — particularly for lower wage earners. But that's made it harder for some companies who are trying to hire workers for remote positions around the country, said James Daire, associate director of legal at Yelp, which supports a nationwide law. The other side: Companies say they need these agreements to keep former employees from spilling secrets, and that they promote innovation. The U.S. Chamber of Commerce says that the FTC simply doesn't have the authority to do this. What's next: The FTC comment period ends in March. The Chamber said it would go to court if necessary to block its implementation. Go deeper     2. Quoted: "Extremely fractious" "Given an extremely fractious political environment, we anticipate an agreement will likely only be reached very late or in an incremental fashion, potentially contributing to flare-ups in financial market volatility." — Moody's Investors Service, as part of a comment on the debt-ceiling fight published Thursday. Why it matters: The supercharged political atmosphere surrounding the fight over the debt ceiling — which only just got started — could cast a cloud over the markets for months. The bottom line: Buckle up.     3. Catch up quick 📉 Google to lay off 1,200 employees. (NYT) 📱 T-Mobile says hackers stole data on about 37 million customers. (WSJ) 🗞 Washington Post braces for layoffs after surprise Jeff Bezos visit. (Axios)     A message from Circle Circle leads conversations at Davos     At the World Economic Forum in Davos, Circle is driving conversations with global leaders to help advance real-world use cases for dollar digital currency. The idea: From humanitarian aid programs to Fortune 500 integration, crypto's utility phase is here. Learn more.     4. Bad vibes on Wall Street Photo: Angela Weiss/AFP via Getty Images   After bursting out of the gates in early 2023, the market seems to have lost its mojo this week, Matt writes. Driving the news: Stocks slumped for a third straight session Thursday, as the S&P declined by 0.8%. That put the S&P down 2.5% for the week, on track for the first down week of the year. Flashback: A week ago, the S&P was up 4.2% for the year, raising hopes of a snap-back from last year's 19% tumble. After the last few days, it's up just 1.6% so far this year. Between the lines: Here's what's taken the spring out of investors' steps. They had hoped that slowing inflation would make the Fed more likely to cut interest rates. But recent verbiage from Fed heads suggests they want to keep hiking until the Fed funds rate is above 5%. The process of raising the debt ceiling looks almost certain to be a gnarly political brawl that could tank markets. (Remember, the S&P 500 fell 15% during the 2011 debt-ceiling brouhaha.) And finally, early fourth-quarter earnings have looked a wee bit soft. Yes, but: None of that makes it a certainty stocks will have yet another awful year. We had a couple of good weeks, and then we had a bad week. That's how markets work. What we're watching: Inflation, of course. (The Fed's preferred inflation gauge is out a week from today.) Read more   Share Axios and earn rewards If you like this newsletter, your friends may, too! Refer your friends and get free Axios swag when they sign up. Be a good friend and share   5. FTX wants a do-over, SBF still chatty Photo illustration: Shoshana Gordon/Axios. Photo: Jeenah Moon/Bloomberg via Getty Images   Rumors of FTX's demise may have been exaggerated, with the platform's new CEO suggesting he may hit the restart button in spite of its stunning collapse. Meanwhile, FTX's criminally charged founder…just won't stop talking, Axios' Javier E. David writes. Driving the news: In a Wall Street Journal interview, John J. Ray III said he's working with a task force that could revive FTX.com. Coincidentally, Sam Bankman-Fried, FTX's disgraced wunderkind CEO, recently insisted the U.S.-based platform is fully solvent, and "always has been." Why it matters: For every spectacular failure like Enron, WorldCom and Lehman Brothers, there's a business that mounts a comeback, like a General Motors, Texaco (now part of Chevron), and Marvel (which now cranks out billion-dollar movie properties under Disney). Yes, but: The cryptocurrency market is still in the throes of an ugly correction. The FTX brand is inextricably bound to a founder who won't stay out of the news despite being charged criminally. He keeps using digital media to remind the public how badly he fumbled. Go deeper     A message from Circle Circle leads conversations at Davos     At the World Economic Forum in Davos, Circle is driving conversations with global leaders to help advance real-world use cases for dollar digital currency. The idea: From humanitarian aid programs to Fortune 500 integration, crypto's utility phase is here. Learn more.   🎧 1 last thing from Matt: I really enjoyed listening to this interview with Rana Foroohar, an author and global business columnist with the Financial Times. She was brilliant on what neoliberal economics — which dominated the post-Cold War era — got wrong. She also has ideas about what could come next in the new era of decoupling. Today's newsletter was edited by Javier E. David and copy edited by Mickey Meece. Why stop here? Let's go Pro. Join the thousands of professionals using Axios Pro to keep up with the companies, deals and trends changing their industries.   Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. To stop receiving this newsletter, unsubscribe or manage your email preferences.   Was this email forwarded to you? Sign up now to get Axios in your inbox.   Follow Axios on social media: