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The Federal Trade Commission (FTC) on Tuesday approved a regulation that would ban noncompete agreements nationwide on the grounds that they unfairly limit workers' mobility and lead to lower pay.
The FTC, which currently has a Democratic majority under President Joe Biden, voted 3-2 to approve the final noncompete rule. The agency first proposed the ban on noncompete agreements in January 2023, arguing they unfairly limit competition.
Noncompete agreements generally prohibit an employee from leaving their current company to work for a competitor and are more commonly used in more senior positions. The FTC's new rule would ban new noncompetes for all workers, including senior executives, as an unfair competitive practice.