The FTC Decrees: No More Non-Compete Agreements

Is there anything that Federal Trade Commission Chair Lina Khan doesn’t think she can do? Apparently not. On Tuesday she and her fellow Democratic commissioners effectively invalidated tens of millions of employment contracts without authority from Congress.

The FTC’s 570-page rule outlaws so-called non-compete agreements across the economy. Employers use these agreements to restrict workers from joining competitors or starting their own firms for a specified duration after leaving. They protect an employer’s intellectual property and investment in worker development.

The FTC says such agreements “restrict the freedom of American workers and suppress wages” and “stifle new businesses and new ideas.” Disregarding reams of evidence to the contrary, the agency bars employers from enforcing existing non-compete agreements for workers who aren’t “senior executives.”