FILE - The Federal Trade Commission building is seen, Jan. 28, 2015, in Washington. U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by the FTC on Tuesday, April 23, 2024, though the rule seems sure to be challenged in court.WASHINGTON — U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency Tuesday, though the rule is sure to be challenged in court.
When it proposed the ban in January 2023, FTC officials asserted that noncompete agreements harm workers by reducing their ability to switch jobs for higher pay, a step that often provides most workers with . By reducing overall churn in the job market, the agency argued, the measures also disadvantage workers who aren’t covered by them because fewer jobs become available as fewer people leave jobs.
Business groups have criticized the measure as casting too wide a net by blocking nearly all noncompetes. They also argue that the FTC lacks the authority to take such a step. Two Republican appointees to the FTC, Melissa Holyoak and Andrew Ferguson, voted against the proposal. They asserted that the agency was exceeding its authority by approving such a sweeping rule.
“If they were to start exercising that authority, you’re really opening a Pandora’s box,” said Neil Bradley, executive vice president at the Chamber. “There’s literally no limitations on what people one day can decide is an unfair method of competition.”
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