Ftc Contract

FTC Bans Noncompete Agreements for Workers

New Rule Protects Employees from Unfair Restrictions

Key Provisions of the New Rule

The Federal Trade Commission (FTC) has banned noncompete agreements for workers in the United States. The new rule, which was approved by a 3-2 vote on Tuesday, requires companies with active noncompete agreements to inform workers that they are void. Companies must also remove any existing noncompete agreements from their contracts and policies. The FTC estimates that the final rule banning noncompetes will lead to 27% more new business formation per year, resulting in more than 8,500 additional new businesses.

The new rule defines the term "senior executive" to refer to workers earning more than $100,000 annually. This means that the vast majority of workers (specifically fewer than 1%) are not considered senior executives and are therefore protected by the new rule.

The FTC estimates that the final rule will lead to significant economic benefits for workers and the economy as a whole. The agency estimates that the new rule will increase wages for workers by $250 billion over the next decade.

The FTC's new rule is a major victory for workers' rights. Noncompete agreements have long been used by employers to unfairly restrict workers' ability to move to new jobs and start their own businesses. The new rule will help to level the playing field for workers and promote economic competition.