On Thursday, the Federal Trade Commission issued a major proposal that would bar employers from using noncompete agreements to lock workers into their jobs and keep wages down.
If an employee signs a noncompete, they are not allowed to work for a competing company for a set period of time. According to the FTC, the agreements mentioned create an unfair competition for workers, and is therefore a violation of federal law.
“The freedom to jump ship to a different employer was at the ‘core’ of economic liberty,” said Lina M. Khan, the commission’s chair, in a statement.
“Khan said that noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand.”
A ban could increase wages for U.S. workers by as much as $300 billion per year, according to the agency’s estimate.
We will share more information as it becomes available.
