FTC ban on noncompete agreements comes under legal attack

abcnews.go.com:

The federal government wants to make it easier for employees to quit a job and work for a competitor

NEW YORK — The federal government wants to make it easier for employees to quit a job and work for a competitor. But some companies say a new rule created by the Federal Trade Commission will make it hard to protect trade secrets and investments they make in their employees.

At least three companies have sued the FTC after it voted to ban noncompete agreements, which prevent employees from working for competitors for a period of time after leaving a job. Their cases are now pending in Florida, Pennsylvania and Texas and the issue could end up in front of the U.S. Supreme Court.

Here's what you should know about noncompete agreements:

Once seen as a way to protect trade secrets among high-level executives, noncompete agreements have become more common, with some companies requiring lower-wage employees in fast-food and retail establishments to sign them before accepting a job.

The agreements prohibit employees from taking a job with a rival company or starting a competing business for a set period of time, to prevent employees from taking corporate secrets, sales leads, client relationships or skills to a competitor.

The FTC voted in April to prohibit employers nationwide from entering into new noncompete agreements or enforcing existing noncompetes starting Sept. 4, saying the agreements restrict freedom of workers and suppress wages.

“In many cases, noncompetes are take-it-or-leave-it contracts that exploit workers’ lack of bargaining power and coerce workers into staying in jobs they would rather leave, or force workers to leave a profession or even relocate,” the FTC said.

The FTC says roughly 30 million people, or