The FTC wants to end non-competition clauses in the USA, in favor of developers

The FTC continues to make daily talk about it in relation to the takeover of Activision Blizzard by Microsoft. The standoff between the Redmond firm and the FTC is far from over, but today the FTC is making the news on another subject that will affect many American workers.

The FTC wants to ban non-competition clauses in the gambling industry

As in many industries, non-competition clauses are meant to prevent an employee from leaving to work for a competitor and starting their own competing business for 3-6 months. Benefiting companies, the latter complicate the lives of workers by reducing their prospects for development in a field that they master and know, not to mention that turnover is all the higher these days.

However, the FTC has just proposed a rule aimed at outright banning non-competition clauses for all workers in the United States. Adopting this rule would allow employees to increase their income by $250 billion to $296 billion a year. The FTC states this:

“About one in five American workers – or about 30 million people – are bound by a non-competition clause and are therefore prevented from seeking better job opportunities. The FTC proposes to prevent employers from entering into covenants non-competition with workers and to require employers to rescind existing non-competition clauses.

These clauses reduce competition for workers, and lower wages for both workers who are subject to them and those who are not. Non-competition clauses also prevent the creation of new businesses and prevent the innovation that would otherwise occur when workers are able to share their ideas widely.”

The FTC would therefore ban these non-competition clauses in all American states, not counting California, which has already banned these clauses since 1872. It remains to be seen whether the process will succeed.