Federal Trade Commission issues ban on worker noncompete clauses

The Federal Trade Commission said that employers can no longer stop their employees from going to work for other companies. However, the U.S. Chamber of Commerce is suing the FTC.

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On Tuesday, the FTC said that they would issue a ban on worker noncompete clauses. This would prohibit companies from barring their employees from leaving and working for a rival company, according to The New York Times.

It is expected to become a law in about 120 days, once it gets published in the Federal Register, according to the newspaper. The rule would void any existing noncompete arguments for those making at least $151,164 a year in “policy-making positions.”

This action by the FTC could help raise salaries, increase business competition and help to create more jobs, the FTC said, according to the Times.

“The FTC is cracking down on ‘non-compete agreements,’ contracts that employers use to prevent their workers from changing jobs even if that job will pay a few dollars more, or provide better working conditions. Workers ought to have the right to choose who they want to work for,” President Joe Biden said regarding the FTC’s announcement, according to CNN.

The decision by the FTC was made in 3-to-2 vote on Tuesday afternoon, CNN reported.

The U.S. Chamber of Commerce said that it is planning to use the FTC because it believes that it exceeded “its administrative authority,” CNN reported. ‘

A lawsuit was filed in a U.S. District Court in Texas. According to the Times, the Business Roundtable, the Texas Association of Business and the Longview Chamber of Commerce joined the lawsuit.

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