MEMPHIS, TN, May 04, 2024 /24-7PressRelease/ — The Federal Trade Commission (FTC) has taken a historic step to enhance competitive practices and promote worker mobility by issuing a final rule that bans non-compete clauses across the United States. Announced on April 23, 2024, this rule is set to liberate workers from the constraints of non-compete agreements that have long been criticized for hindering competition and limiting employment opportunities.
The new FTC rule prohibits employers from entering into or attempting to enforce new non-compete agreements with any workers, including senior executives. It also renders current non-compete clauses unenforceable for the vast majority of workers, freeing nearly 30 million Americans from these restrictions. However, the rule maintains certain provisions for a small fraction of workers classified as senior executives, who represent less than 0.75% of the workforce. Employers are required to notify workers that existing non-compete agreements will no longer be enforced against them.
The anticipated impact of the ban is significant. The FTC estimates that worker earnings could increase by $400-$488 billion over the next decade, with the average worker’s earnings potentially rising by an additional $524 per year. The ban is also expected to result in a 2.7% annual increase in new firm formation, equating to over 8,500 additional new businesses each year. Innovation is likely to advance, with an estimated 17,000-29,000 more patents filed annually for the next ten years. Additionally, the rule could lead to a reduction in healthcare spending by $74-$194 billion over the same period.
The FTC’s final rule reflects a growing consensus that non-compete agreements are detrimental to economic growth and the well-being of American workers. By removing these barriers, the FTC is establishing a new standard for fair competition and worker mobility.
For more information on the FTC’s final rule on non-compete agreements, please contact the FTC’s Office of Public Affairs.
About the Federal Trade Commission: The Federal Trade Commission is dedicated to promoting competition and protecting consumers. It ensures that markets operate competitively and that consumers are well-informed to make sound purchasing decisions.
Contact Information: Victoria Graham Office of Public Affairs Federal Trade Commission Phone: 415-848-5121 Email: [email protected]
This press release is a summary of the FTC’s final rule on non-compete agreements and its implications. For detailed information, please refer to the official documents released by the FTC.
The Crone Law Firm, located in Memphis, Tennessee, is a distinguished employment law firm that champions the rights of employees, executives, and entrepreneurs. With a focus on resolving workplace disputes, the firm specializes in a wide array of practice areas including Non-Compete Agreement litigation, Severance Agreements, Business Law, and Personal Injury, among others. The Crone Law Firm is dedicated to the principle that everyone deserves justice in the workplace. By preparing every case with the readiness to go to trial and offering meticulous attention to employment contracts, the firm stands as a vigilant advocate for those facing obstacles to their professional advancement. Whether it’s a matter of wrongful termination, workplace discrimination, or a business dispute, The Crone Law Firm is committed to ‘Going and Getting Some Justice’ for its clients, ensuring their voices are heard and their rights are protected.
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