Biden’s FTC Issues Ban

( – Responding to Joe Biden’s crackdown on job-creating businesses, the Federal Trade Commission (FTC) has decided to ban noncompete agreements, affecting around 30 million workers.

This figure represents 18% of the U.S. workforce, ranging from fast food employees to top executives. The ban was enacted with a 3-2 vote.

The new rule prohibits creating new noncompete clauses and orders companies to inform current and former employees that such agreements will no longer be enforced.

All existing noncompete clauses must be discarded, although there is an exception allowing them for senior executives.

FTC Commissioner Rebecca Slaughter supported the ban, stating:

“It is so profoundly unfree and unfair for people to be stuck in jobs they want to leave, not because they lacked better alternatives, but because noncompetes preclude another firm from fairly competing for their labor, requiring workers instead to leave their industries or their homes to make ends,”

Set to take effect 120 days after it is published in the Federal Register, the rule’s future is uncertain after pro-business groups vowed to take the measure to court.

These groups argue that noncompete agreements are essential for protecting proprietary information and intellectual property, though the rule still allows nondisclosure and confidentiality agreements.

Although Congress has not legislated on banning noncompetes, there have been bipartisan efforts to reform such agreements, like the Workforce Mobility Act and the Freedom to Compete Act.

In a dissenting opinion, FTC Commissioner Andrew Ferguson stated:

“No matter how important, conspicuous and controversial the issue, and no matter how wise the administrative solution, an administrative agency’s power to regulate must always be grounded in the valid grant of authority from Congress. Because we lacked that authority, the final rule is unlawful.”

U.S. Chamber of Commerce President and CEO Suzanne Clark criticized the FTC’s decision as “a blatant power grab that will undermine American businesses’ ability to remain competitive.”

She warned, “This decision sets a dangerous precedent for government micromanagement of business and can harm employers, workers, and our economy.”

The Chamber plans to sue the FTC to block the rule, which signals another showdown between the business community and the Biden administration.

Biden has been active in regulating corporate practices to allegedly enhance competition and protect consumers.

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