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TechCrunch Minute: FTC bans noncompetes, court challenge incoming
The Federal Trade Commission voted 3-2 this week to ban noncompete agreements, but a court challenge is coming.
While the FTC estimates that nearly one in five American workers is subject to a noncompete, these agreements haven’t been a huge issue in Silicon Valley, because they’re not enforceable in California. Some caveats: This rule only applies to noncompetes, not non-disclosure agreements, so former employees can still get into legal hot water if their old company accuses them of spilling trade secrets. Most significantly, the U.S. Chamber of Commerce says it will sue the FTC over the rule, arguing that the commission doesn’t have the legal authority to issue this kind of regulation.
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