WWE and other wrestling organisations could be forced into changing their contracts due to a new proposal set out by the Federal Trade Commission.
The FTC has proposed a new rule that would make non-compete clauses in contracts illegal. In a press release announcing its intention, the FTC called non-competes:
“[An] exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses. By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans.”
The Chairperson of the FTC Lina M. Khan is quoted as giving her view as to why the clauses should be axed and that they deprive workers of freely changing jobs:
“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy. Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand. By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”
Crucially for the wrestling business, the FTC sets out that the ban would apply to independent contractors and would also nullify any existing non-compete clauses in contracts:
“The proposed rule would apply to independent contractors and anyone who works for an employer, whether paid or unpaid. It would also require employers to rescind existing noncompetes and actively inform workers that they are no longer in effect.”
The FTC’s new rule would make it illegal for an employer to attempt any of the following:
- enter into or attempt to enter into a non-compete with a worker;
- maintain a noncompete with a worker; or
- represent to a worker, under certain circumstances, that the worker is subject to a non-compete.
It is widely believed that WWE enforces a 90-day non-compete clause on stars leaving the company that have been on the main roster while those in NXT are subject to a 30-day clause.