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Uncertainty over FTC ban of noncompetes
The Federal Trade Commission has moved to ban noncompete agreements, affecting an estimated 30 million people in the US.
FOX 2 (WJBK) - A significant change is on the horizon for millions of American workers. The Federal Trade Commission (FTC) has moved to ban noncompete agreements, affecting an estimated 30 million people in the US.
Noncompete agreements bar workers from leaving their employers to join a competitor or start a rival business for a specific period of time. The FTC’s move, which is already being challenged in court, would mean that such employees could apply for jobs they weren’t previously eligible to seek.
"This is amazing. This is probably the best news employees have had in their entire careers," said Heidi Sharp, an employment attorney.
Working for a competitor in your industry may have just gotten a lot easier, as noncompete agreements affect approximately one in five employees across the country.
"The reality is though, a lot of businesses are going to shy away from enforcing things," Sharp said.
Noncompete agreements had once been something only high-level executives in tech and finance had to worry about, but they’ve spread to include even low-wage workers.
"It’s very difficult to understand why a low-compensated employee should be forced to sign a contract that prevents them from going to work for someone else," said David Nacht, another employment attorney.
The FTC has made the argument that breaking down these barriers could lead to better job opportunities and higher wages for a lot of folks.
The FTC's decision came down three-two. Job mobility and overall economic growth could be positively impacted, but there are impending legal battles aimed at overturning the ban.
"The issue here is does the FTC have the right to do this at all?" Nacht said. "I expect it to be struck down. I think it’s really (a) 10% likelihood that this thing is going to actually happen."
The AP contributed to this report.