The US Federal Trade Commission (FTC) voted 3-2 to ban noncompete agreements — which bar employees from working for competing companies either in a specific area or time frame — for an estimated 30M employees, ranging from minimum wage workers to executives.
The US Federal Trade Commission (FTC) voted 3-2 to ban noncompete agreements — which bar employees from working for competing companies either in a specific area or time frame — for an estimated 30M employees.
Noncompete contracts rarely protect company secrets. In fact, buttheir theyprimary dofunction is to shackle employees to their existing companies orby forceforcing them to switch careers or move far away to find a new job if they seek to leave — something most people can't afford to do. By prohibiting employees from starting their own businesses, these contracts also weaken competition. If we want employees and entrepreneurs to thrive, these agreements should be banned at all levels of business.
Despite what these anti-business government officials claim, noncompete clauses actually do promote competition and help, not hinder, employees. This is also an egregious, unconstitutional power grab by three unelected regulators who think they can decide what is and isn't a competitive market. The FTC has never been granted such overarching authority, which is why actual American business leaders will fight this in court.