FTC to Vote on Proposed Rule Banning Noncompete Clauses
Background
The Federal Trade Commission (FTC) has proposed a new rule that would ban employers from imposing noncompete clauses on their workers. Noncompete clauses are widespread and often prevent employees from working for competitors after leaving a company.
Proposed Rule
The proposed rule defines a "senior executive" as a worker earning more than $151,164 annually who is in a policy-making position. The rule would ban noncompete clauses for all workers except senior executives.
FTC Vote
The FTC is scheduled to vote on the proposed rule on Tuesday, April 23. The agency voted more than a year after it first issued the proposed rule in January 2023. The FTC said it has received more than 20,000 comments on the proposed rule.
Impact of the Rule
If the proposed rule is finalized, it would have a significant impact on the labor market. Noncompete clauses are currently used by many employers to prevent employees from joining competitors. The rule would make it easier for workers to change jobs and potentially increase competition in the labor market.
Conclusion
The FTC's proposed rule to ban noncompete clauses is a significant development. The rule would have a major impact on the labor market and could make it easier for workers to change jobs and find better opportunities. The FTC's vote on the proposed rule is expected to be closely watched by employers and employees alike.
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