The Federal Trade Commission (FTC) voted 3-2 on Tuesday to ban noncompete agreements that prevent tens of millions of employees from working for competitors or starting a competing business after they leave a job.
From fast food workers to CEOs, the FTC estimates 18 percent of the U.S. workforce is covered by noncompete agreements — about 30 million people.
The final rule would ban new noncompete agreements for all workers and require companies to let current and past employees know they won’t enforce them. Companies will also have to throw out existing noncompete agreements for most employees, although in a change from the original proposal, the agreements may remain in effect for senior executives.
The U.S. Chamber of Commerce, the largest pro-business lobbying group in the country, has said it will sue to block the rule.
Chamber President and CEO Suzanne Clark called the FTC vote to ban noncompetes “a blatant power grab that will undermine American businesses’ ability to remain competitive.”
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