The FTC’s rule is perhaps the most significant federal regulatory decision thus far in 2023. The commission’s announcement comes more than one year after President Joe Biden issued an executive order encouraging it to ban or limit the use of noncompete agreements.
In a fact sheet accompanying the announcement, FTC estimated that eliminating noncompetes could increase employee earnings in the range of $250 billion to $296 billion per year. It also said the rule could address the agreements’ other impacts on innovation and worker mobility.
“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,” Lina Khan, FTC’s chair, said in a statement. “By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”
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Source: Ryan Golden, Senior Reporter, HR Dive
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