Federal Trade Commission: Votes 3-2 for Historic Ban on Non-Compete Agreements

"The Federal Trade Commission on Tuesday voted 3-2 in favor of adopting a historic and far-reaching ban on noncompete agreements, potentially giving more leverage in the job market to millions of U.S. workers," reported HuffPost. "The agency has said that the agreements, in which workers are forbidden from seeking a job with a competing business for a certain period of time, lead to an “ unfair method of competition” and violate federal law. The vote by the agency’s five commissioners this week means the ban will move forward... Business groups are expected to challenge the legality of the ban, perhaps by arguing that the commission is stepping outside its authority in issuing it, and could seek to have a judge block it from taking effect. Employers often argue that noncompetes are necessary to protect the investments they’ve made in training workers... President Biden (D) had urged the FTC to take action against noncompete agreements not long after taking office, signing an executive order in July of 2021."

The Real Deal previewed this change in January: "Brokerages may have fewer arrows in their legal quiver if the Federal Trade Commission makes good on its new goal of banning non-compete clauses in employment contracts nationwide. The contract provision restricts managers and executives from benefiting rival brokerages by switching jobs, usually within a defined geographic area or time period once a contract ends. Non-compete clauses do not typically affect agents, who are independent contractors."