Proposed FTC rule would ban noncompete agreements and empower workers

Today, the U.S. Federal Trade Commission (FTC) released a proposed rule that, if finalized, would ban noncompete agreements. EPI research has found that at least 36 million workers—27.8% of the private-sector workforce—are required to enter noncompete agreements, which are employment provisions that ban workers at one company from working for, or starting, a competing business within a certain period of time after leaving a job.

In response, EPI president Heidi Shierholz shared a Twitter thread applauding the proposed rule. 

From EPI president, Heidi Shierholz (@hshierholz):

This morning the @FTC released a proposed rule that, if finalized, will ban noncompete agreements. It is REALLY good. 1/ https://t.co/KlnlFHzIjS

— Heidi Shierholz (@hshierholz) January 5, 2023

The research on this is clear. Noncompetes are ubiquitous, they reduce wages, keep workers from finding better opportunities, and reduce the formation of new firms. 3/ https://t.co/NsnAmuwkkY

— Heidi Shierholz (@hshierholz) January 5, 2023

In other words, noncompetes are about reducing competition, fullstop. That’s bad for workers and bad for consumers. This rule would be an important step in creating an economy that works for everyone. 5/ https://t.co/HT8Mjc3NsY

— Heidi Shierholz (@hshierholz) January 5, 2023