The Federal Trade Commission is looking to make a sweeping change to employment laws. It says companies shouldn’t be allowed to prevent employees from switching to a rival company.
In a proposed rule today, the FTC would ban companies from requiring workers to sign non-compete agreements.
The agency says these agreements undermine competition, block workers from freely switching jobs, and quote “deprive them of higher wages.”
The agency estimated 30 million people could have better job opportunities if the rule goes into effect, and wages to U.S. workers would rise by $300 billion dollars per year.
The rule would also require companies to scrap existing non-compete agreements with workers.
About one in five Americans is bound by a non-compete agreement, according to a Treasury Department report from last year.
