When the Federal Trade Commission (FTC) proposed eliminating non-compete clauses earlier this year, employer panic ensued.
The goal? Bolster competition and allow millions of workers to pursue endeavors.
Although it would be assumed that this initiative is beneficial for a company’s reputation, leaders are worried about how relinquishing power could impact their overall business, including trade secrets.
Plus, not only would this once again shift power dynamics between employers and employees, estimates say that banning noncompetes could add an annual $300 billion in workers’ earnings.
Naturally, business leaders are panicking over the potential ban and are already making moves to lobby against the proposal. However, the FTC is expected to put up a fight in order to advocate for better, more fair work conditions for professionals.
Noncompetes prevent workers from pursuing better opportunities or becoming entrepreneurs — both of which are essential for nurturing a healthy, competitive economy.
In fact, the FTC’s researched proposal outlines just how limiting noncompetes are. Not only do they prevent professionals from upskilling, but they also deplete market mobility, wage growth and widen pay gaps among discriminated populations.
Although the FTC has the support of the Senate-ruling Democratic party, as well as President Joe Biden, the proposal has a way to go before it could see fruition.
The public comment period will end on Monday, March 20, after which the FTC will review responses from both anonymous and public figures.