FTC bans most employers from using noncompete clauses; legal challenges expected [Video]

WASHINGTON — The Federal Trade Commission on Tuesday voted to ban for-profit US employers from making employees sign agreements with noncompete clauses. Such a ban could affect tens of millions of workers.

President Joe Biden soon after the announcement said, “the FTC is cracking down on ‘non-compete agreements,’ contracts that employers use to prevent their workers from changing jobs even if that job will pay a few dollars more, or provide better working conditions. Workers ought to have the right to choose who they want to work for.”

The FTC’s decision was the result of a 3-to-2 vote among its five commissioners Tuesday afternoon. The two commissioners who dissented from the majority said they believed the rule to be “unlawful” and “won’t survive legal challenge.” The US Chamber of Commerce has already said it will sue the FTC as early as this week for what it views as the agency exceeding its administrative authority.

What the final rule will do

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