U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by the FTC on Tuesday, April 23.
The FTC voted 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period.
According to the FTC, 30 million people — roughly one in five workers — are now subject to such restrictions.
When it proposed the ban in January 2023, FTC officials asserted that noncompete agreements harm workers by reducing their ability to switch jobs for higher pay, a step that often provides most workers with their biggest pay increases.
The rule, which doesn’t apply to nonprofit workers, is to take effect in four months unless legal challenges block it. Learn more.