The Federal Trade Commission has voted 3-2 to ban noncompete agreements for most workers, meaning millions more people will soon be free to leave their jobs to work for competitors or start their own businesses. The FTC says around a fifth of the US workforce, about 30 million people, is currently bound by noncompete agreements, NPR reports. Under the new rule, set to take effect in four months, they will be released from the agreements. The rule makes an exception for senior executives with existing noncompetes, but companies won't be allowed to set up or enforce new noncompetes.
- "Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned," FTC Chair Lina M. Khan said in a statement. "The FTC's final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market