Earlier this year, the Federal Trade Commission proposed a new rule that would prevent employers from requiring non-compete agreements with their workers. This rule bans all future non-competes and those in existence today. The rule, as written, does not make a distinction based on salary level of the worker and, therefore, would propose to ban non-competes even for highly paid executives and professionals.
The FTC believes that non-competes are unfair methods of competition that suppress salaries and innovation. Chairwoman Lina Khan has stated that “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand.”
No final rule has yet been approved, despite the rule being introduced back in January 2023. A 60-day public comment period followed, which has long since expired. A report by Bloomberg Law indicates that the FTC is not expected to vote on the rule until April 2024.