FTC Ban on Non-Compete Clauses Could Boost Wages by Billions
Effective April 23, 2024, the FTC Rule Prohibits Employers from Restricting Workers' Job Mobility
Federal Trade Commission Chair Lina Khan: "Non-Compete Clauses Stifle Competition and Harm Workers"
Today, the Federal Trade Commission (FTC) announced a landmark decision to ban non-compete clauses in employment contracts. This groundbreaking move is expected to significantly impact the job market and potentially boost wages for millions of American workers.
FTC Chair Lina Khan explained the commission's rationale behind the ban, stating, "Non-compete clauses stifle competition and harm workers by limiting their ability to seek better opportunities and negotiate higher wages. This rule will restore fairness to the labor market and give workers more power to control their own careers."
The FTC estimates that its ban could boost wages and benefits by up to $488 billion over a decade. This is because non-compete clauses often prevent workers from leaving their current jobs for better-paying positions at competing companies.
The vote on the final rule was 3-2, with the three Democratic commissioners supporting the ban and the two Republican commissioners dissenting. The rule will take effect on April 23, 2024.
This decision represents a major victory for workers' rights and is a significant step towards creating a more equitable and competitive job market.
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