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Why the FTC wants to kill off non-compete agreements

Mount Equity Group Tokyo Japan > News > Business > Why the FTC wants to kill off non-compete agreements

Hi Quartz members,

“Should I stay or should I go?” The Clash once wondered. The song, ostensibly, was about quitting a tempestuous relationship. But it may just as easily have been about a non-compete contract. “If I go, there will be trouble,” Mick Jones, the song’s lead vocalist, agonized. Lina Khan would empathize.

Under Khan, the US Federal Trade Commission (FTC) is proposing a ban on non-compete agreements, which prevent a firm’s employees from moving to another company or starting a business in the same field. It’s a decision that could affect roughly 30 million Americans. Khan, the FTC chair, argued that non-compete restrictions drive down wages and prevent better working conditions. Banning non-competes, she estimated, could increase workers’ earnings by $300 billion per year.

Non-compete agreements depress employee earnings by precluding the wage increases that come from switching jobs. A recent report by the…

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