Remember the 14+ Seneca workers in Des Moines who left their jobs after their company switched the equipment they knew how to service, and then got sued by Seneca over their noncompete agreements?
The company has now dropped lawsuits against at least two of those workers.
Both lawsuits, against Seneca workers Darien Berg and Jeffrey Simons Jr., were settled in November, according to Teresa Morio with Shuttleworth and Ingersoll in Cedar Rapids, which represents the company that now employs both workers.
It wasn’t immediately clear if other lawsuits had similarly been settled.
But it brings up the recurring question of whether noncompete agreements should even be legal. The agreements are theoretically supposed to protect company secrets, but end up being used in a much wider way, thwarting workers’ ability to go somewhere else in their field.
The Biden administration did attempt to crack down on noncompete agreements in 2024, saying such agreements cost workers jobs and lead to lower wages. Around 18% of all American workers are subject to such agreements. Many are made to sign the contracts right at the beginning of a job, when it’s harder to say no.
“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism,” Federal Trade Commission (FTC) Chair Lina Khan said.
But in August, a Texas court struck down the federal ban on noncompetes. The FTC said at the time it was “considering” appealing that decision, and says the ruling “does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions.”
