{"id":105289,"date":"2024-04-24T00:03:44","date_gmt":"2024-04-24T00:03:44","guid":{"rendered":"https:\/\/lascrucestoday.com\/newstalklc\/ftc-bans-noncompete-agreements-for-many-americans-but-legal-battle-looms-that-would-delay-change\/"},"modified":"2024-04-24T00:03:44","modified_gmt":"2024-04-24T00:03:44","slug":"ftc-bans-noncompete-agreements-for-many-americans-but-legal-battle-looms-that-would-delay-change","status":"publish","type":"post","link":"https:\/\/lascrucestoday.com\/newstalklc\/ftc-bans-noncompete-agreements-for-many-americans-but-legal-battle-looms-that-would-delay-change\/","title":{"rendered":"FTC bans noncompete agreements for many Americans but legal battle looms that would delay change"},"content":{"rendered":"
\n
Pavlo Gonchar\/SOPA Images\/LightRocket via Getty Images<\/figcaption><\/figure>\n

(WASHINGTON) — The Federal Trade Commission narrowly voted on Tuesday to ban noncompete agreements in a move that could affect up to 30 million Americans — one out of every five workers — in jobs ranging from executives to minimum wage earners.<\/p>\n

While the ban was celebrated by labor unions, pro-business groups have staunchly opposed it and threatened legal action.<\/p>\n

Noncompete agreements are clauses in employment contracts that bar an employee from working at a rival company, usually within a certain geographic area or for a certain amount of time.<\/p>\n

FTC Chair Lina Khan said in a statement after Tuesday’s vote that the noncompete ban, first proposed last year, would “ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”<\/p>\n

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” Khan said.<\/p>\n

The FTC rule would take effect in 120 days. But that timeline will likely be delayed by a high-stakes legal battle. The U.S. Chamber of Commerce told ABC News it plans to sue the FTC within the next day.<\/p>\n

“The Federal Trade Commission’s decision to ban employer noncompete agreements across the economy is not only unlawful but also a blatant power grab that will undermine American businesses’ ability to remain competitive,” the chamber’s CEO, Suzanne Clark, said in a statement.<\/p>\n

But the AFL-CIO, the country’s largest union organization, in a statement lauded the FTC’s “strong” ban and said “[n]oncompete agreements trap workers from finding better jobs, drive down wages, and stifle competition.”<\/p>\n

The FTC said the ban, should it survive court scrutiny, would apply to all workers entering into new employment agreements as they accept new jobs.<\/p>\n

For workers with existing agreements, noncompetes would no longer be enforceable, so companies could no longer stop their employees from taking jobs with competitors.<\/p>\n

One exception is carved out for “senior executives” with existing noncompetes who earn more than $151,164 per year, which is fewer than 1% of workers, according to the FTC.<\/p>\n

The FTC says it expects the ban would increase workers’ combined wages by up to $488 billion over the next decade, with the average worker’s earnings rising an estimated $524 per year.<\/p>\n

Copyright \u00a9 2024, ABC Audio. All rights reserved.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Pavlo Gonchar\/SOPA Images\/LightRocket via Getty Images (WASHINGTON) — The Federal Trade Commission narrowly voted on Tuesday to ban noncompete agreements in a move that could affect up to 30 million Americans — one out of every five workers — in jobs ranging from executives to minimum wage earners. 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