The Federal Trade Commission voted Tuesday to adopt a new rule that would soon ban new arrangements that prohibit workers from switching jobs to competitors, but let existing noncompetes remain for certain senior executives. The U.S. Chamber of Commerce is threatening a court challenge.
U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency Tuesday, though the rule is sure to be challenged in court. The Federal Trade Commission voted Tuesday 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time. The Biden administration has taken aim at noncompete measures, which are commonly associated with high-level executives at technology and financial companies but in recent years have also ensnared lower-paid workers, such as security guards and sandwich-shop employees.