Federal Trade Commission moves to bar noncompete clauses in worker agreements

The U.S. Federal Trade Commission on Thursday said it would move to bar "noncompete clauses" in worker agreements, a measure the commission said could substantially "increase wages" and "expand career opportunities" for laborers. 

The FTC in a news release said its proposal "would ban employers from imposing noncompetes on their workers," which the agency called "a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses."

Noncompete clauses generally mandate that the signee refrain from joining a competing firm or employer in the same industry, either for a set period of time or indefinitely; the convention is nominally used to ensure the retention of trade secrets and business practices.

"By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans," the FTC argued. 

The agency is seeking public comment on the proposal; the comment period will last for 60 days, after which the FTC will move to make it final.