The Federal Trade Commission (FTC) is looking at enacting a total ban on non-compete agreements. They — as most of you know — can prevent a worker from moving to a company that does business in the same field, or from starting a business in that field.
The FTC says a change in non-competes could impact some 30 million of us.
FTC head, Lina Khan is a huge proponent of the change and contends the restrictions put into non-competes push wages downward and prevent better working conditions.
She says they cost American workers somewhere around $300 billion a year.
“Non-competes are bad for workers and undermine labor competition,” she said when the FTC announced the proposed ban. “When one set of workers are locked in place, that reduces churn overall.”
Khan said the ban only applies to employees. It exempts co-owners of companies who sell and want to found a new, similar business, or join a competitor.
The FTC is going to take comments on the proposal for 60 days and then will move to make it final. After the non-compete agreement is deemed to be illegal, employers will have six-months to terminate any non-competes they have enacted.
By the way:
- 18% of American workers are working within a non-compete clause
- 35% of tech workers are bound by one
Source link: Quartz — http://bit.ly/3GVYdIb