The FTC’s proposed ban on noncompetes doesn’t only mean a huge victory for Gen Z workers. Here’s why it also benefits employers across the country

FTC Chair Lina Khan (Credit: Tom Williams/CQ-Roll Call, Inc via Getty Images)

Last week, the Federal Trade Commission announced a rule that would block employers from including noncompete provisions in employment contracts. This means that workers who want to leave their jobs for another working environment or earning opportunity are now able to forge ahead, without fear of legal action from their former employers. The move, by some calculations, could result in a $300 billion wage increase for workers.

Employers have historically turned to noncompetes to reduce turnover and keep workers from fleeing to competition, as demonstrated by a study from the Economic Policy Institute that found 30% of U.S. employers had all of their employees sign noncompetes, and nearly 50% of employers had some of their employees enter noncompete agreements. Of course, for workers with intimate knowledge of trade secrets like proprietary technology or convoluted recipes, it would make sense that employers should on a case-by-case basis cement confidentiality provisions.