FTC Bans Non-Compete Agreements Nationwide in Effort to Boost Competition and Wages for Millions of Workers

The US Federal Trade Commission has recently made the decision to ban non-compete agreements nationwide. After initially proposing the measure in January 2023, the FTC voted 3-2 to implement this ban with the goal of preventing wage suppression and promoting innovation. Non-compete agreements have become common in various industries due to limited oversight and a decrease in unionisation, with an estimated 30 million workers currently bound by these clauses.

FTC chair Lina Khan emphasized that non-compete agreements are unfair methods of competition that limit workers’ personal freedoms and hinder competition in product and service markets. The agency received over 26,000 public comments on the matter, with industry groups opposing the ruling, claiming it is too severe and will lead to increased business costs and may compromise trade secrets.

Andrew Ferguson, a Republican FTC commissioner, argued that the agency did not have the authority granted by Congress to enforce such a ban. This decision has sparked controversy among stakeholders, and it remains to be seen how it will impact the business landscape in the US.