WASHINGTON — A proposal from the Federal Trade Commission to ban noncompete agreements aims to correct what some say is a harmful power imbalance between companies and employees, an issue prominent enough to have won over some members of the typically pro-business Republican Party.
The move, however, sets the stage for a fight — likely in the courts and potentially in Congress, if the pushback is strong — over whether the agency can legally intervene in what are essentially contracts between workers and their employers.
The FTC’s proposed rule would bar employers, whether small businesses or Fortune 500 companies, from requiring noncompete or similar contracts, a practice that restricts workers’ ability to leave for job opportunities at rival firms or start their own competing ones. It would nullify existing agreements with current and former employees within 180 days of the final rule’s publication.
