---
title: The end of noncompetes?
description: The FTC wants to ban noncompetes, saying it could boost US wages by up to nearly $300B annually.
---

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# [The end of noncompetes?](https://hs-sbup.thehustle.co/news/01062023-noncompetes)

 Written by [Juliet Bennett Rylah](https://hs-sbup.thehustle.co/news/author/juliet-bennett-rylah) | Jan 6, 2023 8:51:42 AM

Employees reluctant to look for new gigs due to noncompete clauses have the FTC in their corner.  
 On Thursday, the agency [proposed](https://www.ftc.gov/legal-library/browse/federal-register-notices/non-compete-clause-rulemaking) banning both new and existing noncompetes nationwide. The new rules would *not *apply to standard NDAs, nor noncompetes between those buying and selling companies.

#### **What’s a noncompete clause?**

A contract that prevents someone from working for or starting a competing business if they leave their current job, voluntarily or not. Usually, they expire after a period of time (e.g. one year) and come with geographic boundaries.

Some states, [including](https://www.politico.com/news/2023/01/05/biden-ftc-regulations-employment-noncompetes-00076444#:~:text=States%20including%20California%2C%20North%20Dakota,among%20certain%20groups%20of%20workers.) California and North Dakota, have already banned them. The FTC argues that they trap workers and decrease competition, resulting in lower wages [marketwide](https://www.vice.com/en/article/88qjjz/ftc-proposes-ban-on-worker-non-compete-clauses) and a lack of new business, entrepreneurship, and innovation.

**Per the FTC:**

- Noncompetes affect ~20% of US workers.
- Banning them could increase US workers’ earnings by $250B-$296B annually.

#### **Is anyone opposed to banning them?**

The US Chamber of Commerce doubts that the FTC has the authority to enact such a broad ban and is considering a lawsuit, [per](https://www.wsj.com/articles/ftc-proposes-banning-noncompete-clauses-for-workers-11672900586) *The Wall Street Journal*.

And proponents of noncompetes say:

- They protect confidential company and customer info.
- They encourage employers to [invest](https://www.usnews.com/news/business/articles/2023-01-05/ftc-proposes-rule-that-would-ban-noncompete-clauses) in employees’ education.

But the FTC asserts that noncompetes have gone too far, encompassing lower-wage workers who lack access to such intel.

Earlier this week, it [announced](https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-cracks-down-companies-impose-harmful-noncompete-restrictions-thousands-workers) a crackdown on a few noncompetes, including one that prohibits security guards, who make near minimum wage, from working at other security firms within a 100-mile radius, else pay $100k.

[View full post](https://hs-sbup.thehustle.co/news/01062023-noncompetes)

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