The Federal Trade Commission building in Washington is pictured on Jan. 28, 2015. The Federal Trade Commission is proposing a new rule that would prevent employers from imposing noncompete clauses on their workers. (AP Photo/Alex Brandon, File)
The U.S. Federal Trade Commission (FTC) has proposed a rule that would ban the practice of companies forcing workers to sign non-compete clauses in their contracts.
Once limited to highly paid executive positions, such clauses are increasingly common in white collar jobs of all types of levels of compensation. One 2021 study out of the University of Chicago found that approximately 18 percent of the labor force is bound by non-competes.
Yet critics of the practice say it greatly limits workers' flexibility to change jobs.
“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” said Chair Lina M. Khan in a statement. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand. By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”
The FTC estimates the rule could increase overall wages by $300 billion per year. The agency is pursuing the ban under Section 5 of the FTC Act, which targets unfair methods of competition. The public now has 60 days to comment on the rule change.
“The proposed rule would ensure that employers can’t exploit their outsized bargaining power to limit workers’ opportunities and stifle competition," said Elizabeth Wilkins, director of the Office of Policy Planning at the FTC.
Former President Donald Trump returned to a New York City courtroom Tuesday to watch the civil fraud trial that threatens to disrupt his real estate empire, renewing his claims that the case is a baseless and politically targeted distraction from his 2024 campaign.
President Joe Biden swept into wartime Israel for a 7 1/2-hour visit Wednesday that produced a heaping dose of vocal support and a deal to get limited humanitarian aid into Gaza from Egypt.
The Pentagon has sent “prepare to deploy” orders to about 2,000 U.S. troops to be ready to respond to the Israel-Hamas war, two U.S. officials said on the condition of anonymity to discuss a decision that has not been announced yet.
The head of Israel’s Shin Bet security service has taken responsibility for not warning of the bloody Oct. 7 Hamas rampage that killed over 1,400 Israelis.
Republicans rejected Rep. Jim Jordan for House speaker on a first ballot Tuesday, as an unexpectedly numerous 20 holdouts denied the hard-charging ally of Donald Trump the GOP majority needed to seize the gavel.
The federal judge overseeing the 2020 election subversion case against Donald Trump in Washington imposed a narrow gag order on him on Monday, barring the Republican former president from making statements targeting prosecutors, possible witnesses and the judge's staff.
A 71-year-old Illinois man accused of fatally stabbing a 6-year-old boy and seriously wounding a 32-year-old woman was charged with a hate crime Sunday.
