New federal rule would bar ‘noncompete’ agreements for most employees

WASHINGTON — U.S. companies would no longer be able to bar employees from taking jobs with competitors under a rule approved by a federal agency Tuesday, though the rule is sure to be challenged in court. The Federal Trade Commission voted Tuesday 3-2 to ban measures known as noncompete agreements, which bar workers from jumping to or starting competing companies for a prescribed period of time. “They don’t want somebody to go to a competitor and take their customer list or take their information about their business strategy to that competitor.” But Alexander Hertel-Fernandez, a professor at Columbia University who is a former Biden administration Labor Department official, argued that lower-income workers don’t have the ability to negotiate over such provisions. “Noncompete agreements are either upheld or dismissed under well-established state laws governing their use,” said Suzanne Clark, the chamber’s CEO. “Yet today, three unelected commissioners have unilaterally decided they have the authority to declare what’s a legitimate business decision and what’s not by moving to ban noncompete agreements in all sectors of the economy.” Two Republican appointees to the FTC, Melissa Holyoak and Andrew Ferguson, voted against the proposal.