What the FTC’s Noncompete Agreement Ban Could Mean for You
A ban on noncompete agreements could go into effect this year. Here’s what to expect.
Federal Trade Commission (FTC) headquarters in Washington, DC.
Photographer: Andrew Harrer/Bloomberg
Noncompete agreements bar about 30 million American workers from quitting their jobs to work for rival companies or start their own businesses, a practice that the Federal Trade Commission calls exploitative and wants to ban.
The arrangements, which critics say can hold down wages and hinder innovation, are especially common in industries like manufacturing, technology and health care, where as many as 45% of primary care physicians are bound by the agreements. While the rationale for these clauses is often to protect intellectual property, they can restrict low-wage workers like food service employees and security guards from seeking a similar job in the same field.