Non-compete agreements: A growing concern in the workplace

Non-compete agreements have become increasingly common in the workplace, affecting around 40 million Americans. Originally used for high-level executives, they have now proliferated across sectors and income levels. Economic research shows that these agreements hinder competition, restrict innovation, and result in lower wages for workers. While some states have restricted or made non-competes unenforceable, they continue to be used and intimidate employees, preventing them from seeking better opportunities or starting their own businesses. The Federal Trade Commission (FTC) recently proposed a rule to make all non-compete agreements unenforceable, indicating a significant shift in addressing the issue. This proposed rule has received positive reactions from workers, business people, and even the President and Vice President. However, opponents, such as the US Chamber of Commerce and some conservative judges, are likely to challenge the rule in court. The FTC will accept public comments on the proposed rule before finalizing it, and when it takes effect, it will have immediate impacts on employment contracts and business practices.