The Federal Trade Commission issued a final rule Tuesday to ban noncompete contracts that prevent employees from joining rival companies in a move that immediately drew a legal challenge.
U.S. Chamber of Commerce President and CEO Suzanne Clark said the measure was illegal and would hurt businesses and workers.
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The Federal Trade Commission (FTC) issued a final rule Tuesday banning noncompete agreements nationwide, affecting millions of Americans.
Regulators argue that banning noncompetes will promote competition by giving workers greater ability to switch jobs, increasing innovation and leading to more businesses being created, according to an announcement from the FTC. The FTC estimates that around 18 percent of U.S. workers, or 30 million people, are covered under a noncompete, with the new rule applying to anyone not in a senior executive role, which is defined as someone who is making more than $151,164 and in a policy-making position.
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