The United States Trade Commission has announced a prohibition on employers imposing non-compete clauses on employees, covering all levels except for top-level executives who had previously signed off on them. Even these high-ranking executives are now forbidden from entering into new agreements of this nature.
Historically, the US has employed approximately 18% or 30 million people under such agreements, although enforcement has been minimal, with a focus on existing high-level employees. In 2022, Microsoft went as far as canceling such agreements.
The FTC anticipates that this overall ban will foster increased competition, innovation, and higher overall employee wages, possibly leading to a rise in the establishment of new companies.
TLDR: The US Trade Commission has imposed a ban on non-compete clauses, aiming to boost competition, innovation, and employee wages.
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