Biden administration bans noncompete agreements, setting up legal showdown with business groups

The Biden administration has issued a nationwide ban on the ability of employers to make their workers sign noncompete agreements, a move regulators said would help boost employee pay but which is set to be challenged in court by business groups. In a ruling Tuesday afternoon, the Federal Trade Commission said noncompete clauses would henceforth be illegal.

'Noncompetes are bad for workers, bad for consumers, and bad for the broader economy. This rule is an important step in creating an economy that is not only strong but also works for working people.' The AFL-CIO, America's largest labor group, praised the new rule in a post on X Tuesday, saying noncompete agreements 'trap workers from finding better jobs, drive down wages, and stifle competition.

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