FTC Bans Non-Compete Agreements Nationwide to Boost Worker Freedom and Innovation

In a historic decision, the US Federal Trade Commission (FTC) has voted to ban non-compete agreements nationwide. The measure aims to prevent wage suppression and promote innovation in various industries. Non-compete contracts have been increasingly common with limited oversight and a decline in union membership. It is estimated that around 30 million workers are currently bound by these agreements.

The FTC’s chair, Lina Khan, emphasized that non-compete clauses are unfair and hinder competition in markets for products and services. Over 26,000 public comments were considered by the agency before reaching this decision. Industry groups have criticized the ruling, arguing that it is too extreme and will lead to higher business costs and potential risks to trade secrets.

One of the opposing FTC commissioners, Andrew Ferguson, stated that the rule is unlawful because the agency lacks the authority granted by Congress. Despite the opposition, the ban on non-compete agreements marks a significant shift in labor practices and could have far-reaching implications for workers across the country.