04/23/2024

FTC Finalizes Rule Banning Most Employers from Using Noncompete Clauses

However, legal challenges are expected

On Tuesday, the Federal Trade Commission (FTC) voted to ban for-profit U.S. employers from making employees sign agreements with noncompete clauses. Such a ban could affect tens of millions of workers.

"The FTC is cracking down on ‘non-compete agreements,’ contracts that employers use to prevent their workers from changing jobs even if that job will pay a few dollars more, or provide better working conditions," said President Joe Biden soon after the announcement. "Workers ought to have the right to choose [for whom] they want to work."

The FTC’s decision was the result of a 3-to-2 vote among its five commissioners Tuesday afternoon. The two commissioners who dissented from the majority said they believed the rule to be "unlawful" and "won’t survive legal challenge." The U.S. Chamber of Commerce has already said it will sue the FTC as early as this week for what it views as the agency exceeding its administrative authority.

Please select this link to read the complete article from CNN.