The Federal Trade Commission (FTC) on Tuesday voted to ban companies nationwide from using noncompete agreements to prohibit employees from taking new jobs in their industry.
The Biden administration has pushed the FTC since 2021 to make changes to its noncompete policies, which can affect even low-level employees who are not entitled to trade secrets. The FTC first proposed the idea in January of 2023, claiming it could “increase wages” and “expand career opportunities.”
The Democratic-led commission voted in favor of the ban in a 3-2 ruling, which will go into effect on Aug. 21, 2024. The two Republicans on the agency’s commission voted against the ban, claiming that the FTC does not have jurisdiction to create or enforce the rule, according to CBS News. The ruling is expected to be challenged by businesses in courts.
“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including […]
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