Home | WebMail | Register or Login

      Calgary | Regions | Local Traffic Report | Advertise on Action News | Contact

Posted: 2024-04-23T18:57:31Z | Updated: 2024-04-23T20:06:23Z

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.

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 agencys five commissioners this week means the ban will move forward.

The FTCs three Democratic members were in favor of adopting the regulation, while its two Republican members were against it.

Noncompetes have been under fire for years because of the way they can lock workers into jobs and suppress wages by reducing mobility in the labor market. And they are not strictly the domain of well-compensated executives and engineers; these days, even fast-food workers can find themselves barred from taking a job at a competing business.

The FTC estimated that the ban would boost wages by between $400 billion and $488 billion over 10 years.

Lina Khan, the commissions chair and a progressive appointee of President Joe Biden, said Tuesday that non-compete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism.

The FTCs final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market, Khan said.

The agency estimated that the ban would boost wages by between $400 billion and $488 billion over 10 years, and lead to the creation of more than 8,500 new businesses per year.

Business groups are expected to challenge the legality of the ban and seek to have a judge block it from taking effect. The commissions two dissenting members argued that the agency was stepping beyond its authority in issuing the ban, saying such powers should be left with the Congress.