Blogcast: What will the FTC ban on Non-Compete agreements mean for innovation?
25 April 2024
Hannah Garden-Monheit, Director of the Office of Policy Planning of the Federal Trade Commission (FTC) talks with Seth Harris on the Power at Work Blog about the FTC's new rule banning almost all non-compete agreements in employment relationships.
Garden-Monheit led the team that drafted the rule. In dialogue with Harris, Garden-Monheit provides expert analysis of the kinds of workers who will benefit from the ban on non-competes (including some poignant examples), how the rule will increase workers’ wages and grow entrepreneurship and innovation, and the rule’s prospects in court when the inevitable legal challenges from business trade associations begin.
The FTC estimates that 30 million American workers across a diverse range of occupations and industries are subject to non-compete agreements. Non-competes block workers from quitting their jobs to work for their employers’ competitors or to start their own competing businesses. Since quitting is an important tool for workers to bargain for higher wages and better working conditions, and to find jobs that better match their skills, non-compete agreements are an important barrier to worker power and workers using their power to improve their lives in the United States.
The FTC is the nation’s antitrust and competition regulatory and enforcement agency. The members of the Commission voted to establish the new ban on non-compete agreements in employment on Tuesday, April 25th by a 3-2 vote. The ban will take effect 120 days after the new rule is published in the Federal Register, probably during the next few weeks.
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