: Noncompete agreements will be a thing of the past for workers — from hairstylists to executives — if federal regulators have their way

by | Jan 8, 2023 | Stock Market

Employers would be banned from making staff sign noncompete clauses, according to proposed rules that federal regulators say would boost worker pay and end a major drag on people who wish to change jobs, and stay in the same industry. The Federal Trade Commission released the proposed rules on Thursday designed to end worker noncompete clauses, which typically prevent the person signing it from leaving their job in order to start a rival business, or simply take a job with a competitor.

In theory, the clauses are supposed to protect businesses from former employees poaching clients, among other nefarious sales tactics. But the overly restrictive clauses are popping up in all kinds of work in for high- and low-paying jobs, ranging from warehouse workers and hairstylists to doctors and business executives, the FTC said. Approximately 30 million workers are restricted by noncompete agreements, the FTC said. Doing away with the clauses would boost worker earnings between $250 billion and $296 billion annually and would narrow the pay gaps between men and women, as well as the pay gap between whites and minority workers. In 2019, one estimate from researchers at Cornell University and the Economic Policy Institute, a left-leaning think tank, said between one-quarter and nea …

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