Home » The End of Non-Compete Agreements: FTC Rule Allows Employees to Accept Jobs with Competitors

The End of Non-Compete Agreements: FTC Rule Allows Employees to Accept Jobs with Competitors

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The End of Non-Compete Agreements: FTC Rule Allows Employees to Accept Jobs with Competitors

A federal agency has approved a rule that prevents American companies from preventing their employees from accepting jobs with competitors. The Federal Trade Commission revealed that approximately 30 million workers are now subject to these types of restrictions, which have been targeted by the Biden administration. The FTC President, Lina Khan, has been a prominent advocate for this measure, citing stories from workers who have been trapped in abusive workplaces due to non-compete agreements.

The FTC received over 26,000 public comments leading up to the vote, with Khan emphasizing the need to end these agreements to allow workers to freely change jobs. The policy change is estimated to lead to wage increases totaling almost $300 billion a year. While the ban is set to come into force at the end of the year with exceptions for existing non-compete agreements for senior executives, dissenting commissioners argue that the FTC is overstepping its power.

Opposition to the ban comes from the United States Chamber of Commerce, which argues that non-compete agreements can benefit companies by protecting trade secrets. However, the FTC believes that employers should not enforce existing non-compete agreements. This decision is expected to have a significant impact on minimum wage workers, such as retail employees, by allowing them more freedom in choosing their employment opportunities.

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