FTC Proposes Banning Noncompete Clauses for Workers
wsj.comWASHINGTON—The Federal Trade Commission on Thursday issued a proposal to ban the use of noncompete clauses, a move that would allow workers to take jobs with rival companies or start competing businesses without the threat of being sued by their employers.
The FTC said noncompete clauses constitute an exploitative practice that undermines a 109-year-old law prohibiting unfair methods of competition. Noncompete clauses, which typically bar employees from joining a competitor for a period after they quit, affect nearly one in five American workers, according to the agency. Long associated with higher-paid managers, the clauses have also been imposed on lower-wage workers who lack access to trade secrets, strategic plans and other reasons that could be cited for hampering job switchers, the agency says.
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