The FTC estimates that 18% of the U.S. workforce is subject to non-compete agreements.That’s about it 30 million There are people ranging from fast food workers to CEOs.
Once the final rule goes into effect, it will be prohibited. new non-compete agreement. Companies would also be required to terminate existing non-compete agreements for most employees.
However, in a change from the original proposal, the final rule provides: exception Existing contracts covering senior executives may remain in effect.
The FTC says the new rules will give workers more freedom to change jobs and earn more money, as well as give them more pay raises. competition and entrepreneurship In the US economy.
“It is extremely inconvenient and unfair for people to be stuck in jobs they would like to leave, not because there are no better alternatives, but because a lack of competitiveness prevents other companies from competing fairly for labor. “In order to make ends meet, workers were forced to leave their industries and homes in order to make ends meet.” Rebecca Slaughter (D) said in prepared comments.
New rules are coming into effect 120 days After publication in the Federal Register.
But its future is uncertain, with at least one major business lobby saying it has plans to: sue the FTC To prevent the enforcement of laws.
Large companies need non-compete agreements to protect confidential information and intellectual property, but this rule does not prohibit other means of achieving that goal, such as non-disclosure or non-disclosure agreements. I warned you that there is no. They also question the authorities’ authority to issue blanket and retrospective bans.
Chamber of Commerce and Industry Director and CEO Suzanne Clark It called the new rules “a blatant power grab that undermines the ability of American companies to remain competitive.”
“This decision sets a dangerous precedent for government micromanagement of business, with the potential to harm employers, workers and the economy,” Clark said.
“The Chamber will sue the FTC to stop this.” unnecessary and illegal Establish rules and put other agencies on notice that such excesses will not go unchecked. ”
The Hill’s Taylor Giorno There’s more here.
