US moves to ban non-compete agreements in labour contracts: Reports

The US Federal Trade Commission, which enforces antitrust law, proposed a rule that would ban companies from requiring workers to sign non-compete provisions as well as some training repayment agreements, which companies use to keep workers from leaving for better jobs, the agency said on Thursday. The proposal seeks comment on a potential rule, which is months away, if not longer, from taking effect.

Non-compete agreements “block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand,” said FTC member in a statement. The proposed rule is the latest sign from the Biden administration of its support for labor, including backing a measure to make it harder for an employer to classify a person as an “independent contractor,” which generally means fewer benefits and legal protections. The estimate is that if the rule goes into effect, wages to US workers would rise by $300 billion per year and an estimated 30 million Americans would have better career opportunities. The rule would also require companies with existing non-compete agreements with workers to scrap them and to inform current and past employees that they have been canceled. It would also stop companies from requiring workers to reimburse companies for certain kinds of training if they leave before a certain period of time.