Noncompete clauses in employment contracts harm workers by reducing wages and preventing them from finding new and better opportunities. They may, however, become a thing of the past.
About one in five workers are subject to noncompete clauses, which heavily favor employers and prevent workers from seeking new opportunities within a set amount of time after leaving their job. These provisions reduce competition by keeping workers at one company from working for another or starting a competing business, basically undermining the most critical power non-union workers have—the ability to quit. The Federal Trade Commission (FTC) proposed a ban on almost all noncompete clauses earlier this year. The new proposed rule has the potential to increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans—and if one thing is clear, when workers win, we all win.
The Economic Policy Institute hosted a virtual panel discussion on the proposed rule to ban noncompete clauses and how it may impact worker power across the country.
The panel tackled key questions including:
- What are noncompete clauses, and how do they affect workers and the economy?
- What were the policy considerations underlying the FTC proposal?
- What are next steps in the rule-making process, and how can advocates and the public weigh in?
- Is there still a need for noncompete reform at the state level?
- Elizabeth Wilkins, Director of the Office of Policy Planning and Acting Chief of Staff at the Federal Trade Commission
- Dr. Evan Starr, Associate Professor of Management and Organization at the Robert H. Smith School of Business, University of Maryland
Moderator: Terri Gerstein, Senior Fellow, Economic Policy Institute; Director, State and Local Enforcement Project at Harvard Center for Labor and a Just Economy
Kevin Borowske, a former caretaker at FirstService Minnesota, shared his experience with noncompete clauses during the discussion.
When: Wednesday, March 1, 2023, 3:00–4:00 p.m. ET, 12:00–1:00 p.m. PT