Noncompetes Are Dead—and Tech Workers Are Free to Roam
More US workers will soon be free to leave their employers to work for rivals, thanks to a new federal rule that will block the long-standing practice of locking in workers with noncompete agreements.
The US Federal Trade Commission on Tuesday issued a final rule that bans most noncompetes nationwide. The agency estimated that by allowing people more freedom, the change would lead to the creation of 8,500 new businesses annually, an average annual pay increase of $524 for workers, lower health care costs, and as many as 29,000 more patents each year for the next decade.
The FTC says about one in five US workers are bound by contract clauses that prevent them from taking new jobs from a competitor, or starting their own competing businesses, for some period of time. The agreements can trap workers and slow career advancement and wage increases—two things workers often achieve by hopping jobs.
