U.S. bans worker ‘noncompete’ agreements as business groups vow to sue

U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by the Federal Trade Commission on April 23, though the rule seems sure to be challenged in court.The U.S. Federal Trade Commission on Tuesday approved a rule to ban agreements commonly signed by workers not to join their employers’ rivals or launch competing businesses, which it says limit worker mobility and suppress wages.

FTC Chair Lina Khan during the meeting said noncompetes not only restrict workers’ opportunities but can infringe on other fundamental rights by blocking them from changing jobs. “We are not a legislature,” Ferguson said. “I do not believe we have the power to nullify tens of millions of existing contracts.”

The U.S. Chamber of Commerce, the country’s largest business lobby, has already said that it will file a legal challenge as soon as Wednesday. Neil Bradley, the Chamber’s chief policy officer, told reporters during a call on Monday that the commission lacks the power to adopt rules. “We commend the FTC and for finalizing a strong rule to ban these exploitative practices and level the playing field for American workers,” it added.

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