U.S. Moves to Bar Noncompete Agreements in Labor Contracts

January 23, 2023 — 

A sweeping proposal by the Federal Trade Commission would block companies from limiting their employees' ability to work for a rival. The F.T.C. said a ban on noncompete clauses could increase wages by nearly $300 billion a year across the economy.

In a far-reaching move that could raise wages and increase competition among businesses, the Federal Trade Commission on Thursday unveiled a rule that would block companies from limiting their employees' ability to work for a rival.

The proposed rule would ban provisions of labor contracts known as noncompete agreements, which prevent workers from leaving for a competitor or starting a competing business for months or years after their employment, often within a certain geographic area. The agreements have applied to workers as varied as sandwich makers, hairstylists, doctors and software engineers.

Read the full story in The New York Times.

[Source: The New York Times 5 Jan 2023 by Noam Scheiber]