According to Reuters: "In proposing the rule last year, the FTC estimated that it could increase workers' earnings by nearly $300 billion per year and would improve the job opportunities of 30 million Americans."

I believe that non compete agreements are definitely against the interest of workers. It reduces pay and mobility. Also, these agreements prevent the most efficient matching of workers with jobs. And they slow the flow of information and skilled workers between companies. So the overall impact on industry and the economy of the FTC rule would be positive.

Reference: https://www.reuters.com/world/us/us-agency-poised-ban-worker-noncompete-agreements-2024-04-23/

https://old.reddit.com/r/economy/comments/1cb27lt/ftc_to_ban_non_compete_agreements_a_win_first_for/

by fool49

2 comments

  1. Banning non-compete clauses might make sense for entry-level employees at places like fast food chains or warehouses for companies such as FedEx or Amazon. You can’t just abolish these clauses for high-level executives or employees involved in developing/access to proprietary technology or processes without an avalanche of lawsuits. These workers have access to unique knowledge that gives their companies a competitive edge. Without non-compete agreements, larger companies could easily poach top talent from smaller firms, either to weaken them or to acquire them indirectly. This is more complex than you’re making it out to be. 

    Edit: I see commenters are missing the point. Not everything is black and white. 99% of people shouldn’t even have a non compete and the rules should be stricter about what can be put in a non compete but we continue to see consolidation of power in large corporations and this will only further that if not properly regulated. There are reasons to protect small business from money just gobbling things up. When we all work for Walmart you’ll see that not everything is was straight forward as we continue to remove certain business protections without a nuanced approach.

  2. Can’t wait for the Supreme Court to step in and block this.

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