New U.S. Rule Bars "Noncompete" Agreements For Employees

US companies will no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency, though the rule is sure to be challenged in court, reported Christopher Rugaber for the Associated Press (AP).

The Federal Trade Commission voted 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time.

The Federal Trade Commission voted 3-2 on Tuesday to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time.

According to the FTC, 30 million people — roughly one in five workers — are now subject to such restrictions.

The Biden administration has taken aim at noncompete measures, commonly associated with high-level executives at technology and financial companies but in recent years have also ensnared lower-paid workers, such as security guards and sandwich-shop employees.

A 2021 study by the Federal Reserve Bank of Minneapolis found that more than one in 10 workers who earn $20 or less an hour are covered by noncompete agreements.