FTC moves to ban non compete agreements; how labor deals will be impacted

Adobe Stock Photo The Federal Trade Commission (FTC) has taken a major stride towards reshaping the landscape of labor agreements in the United States by voting 3-2 to ban non compete agreements.& These agreements have long been criticized for their restrictive nature, preventing millions of workers from pursuing better opportunities and stifling competition in the labor market. According to the FTC, an estimated 18 percent of the U.S. workforce, roughly 30 million people, are currently bound by noncompete agreements. From fast-food workers to top executives, these agreements have limited employees’ ability to seek employment with competitors or even start their own businesses after leaving their current jobs. The new rule, which is set to go into effect 120 days after its publication in the Federal Register, represents a significant departure from the status quo. Under the rule, companies will be prohibited from imposing new noncompete agreements on their employees. Additionally, companies will be required to inform current and former employees that they will not enforce existing noncompete agreements. FTC Commissioner Rebecca Slaughter (D) emphasized the unfairness of noncompete agreements stating, “It is so profoundly unfree and unfair for people to be stuck in jobs they want to leave, not because...