The Federal Trade Commission released a major proposal Thursday that would bar employers from using noncompete agreements to lock workers into jobs and reduce wages.
Employees who enter noncompetes are prohibited from taking jobs in competing companies for a certain period of time. The FTC said the agreement created an “unfair means of competition” for workers and therefore violated federal law.
Lina M. Khan, the commission’s chairwoman, said the freedom to jump to a different employer is at the “core” of economic freedom.
“Noncompetes prevent workers from freely switching jobs, depriving people of higher wages and better working conditions, and depriving businesses of the talent pool they need to build and expand,” said Khan.
The agency estimates that the ban could increase wages for U.S. workers by $300 billion annually.
This is a developing story. Please check back for updates.