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FTC votes to ban most employers from using noncompete clauses. But legal challenge is expected
The Federal Trade Commission on Tuesday voted to ban for-profit US employers from making employees sign agreements with noncompete clauses. Such a ban could affect tens of millions of workers.
The two commissioners who dissented from the majority said they believed the rule to be “unlawful” and “won’t survive legal challenge.” The US Chamber of Commerce has already said it will sue the FTC as early as this week for what it views as the agencyexceeding its administrative authority. And for most of them, the agency asserts, such a clause restricts them from freely switching jobs, lowers wages, stifles innovation, blocks entrepreneurs from starting new businesses and undermines fair competition. An FTC staff member presenting the final rule to the commissioners during Tuesday’s meeting characterized noncompete agreements as “exploitative and coercive” for employees other than senior executives.
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