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Noncompetes Are Out
06. May 2024No More Noncompete Clauses
The U.S. Federal Trade Commission (FTC) has issued a final rule banning most noncompete agreements, which are often used to restrict tech workers’ employment opportunities. The rule is expected to increase worker mobility, leading to higher wages, more entrepreneurship, and a boost in innovation. This rule could significantly alter the landscape of employment and innovation in the tech industry.
While some argue noncompetes protect trade secrets and encourage staff investment, recent research suggests their absence does not increase trade secret litigation. The rule, which will take effect in about four months, may face legal challenges, including a lawsuit from the U.S. Chamber of Commerce.