How will the ending of non-compete agreements impact your business?

Non-compete agreements have been a long-standing practice in many industries, with employers often using them to protect their business interests. However, recent studies have shown that these agreements may do more harm than good, leading to a call for their end. This has resulted in the Federal Trade Commission (FTC) proposing new rules to restrict the use of non-compete agreements. Let's take a closer look at how ending non-compete agreements would impact employers and what the proposed FTC rule entails.

How Ending Non-Compete Agreements Would Impact Employers

The use of non-compete agreements has become increasingly widespread, with one survey indicating that nearly 30% of U.S. workers have signed a non-compete agreement at some point in their career. While these agreements were initially designed to protect an employer's investment in their employees, research has shown that they can lead to negative consequences for both employees and employers.

For employers, non-compete agreements can lead to a decrease in employee loyalty, limit access to the best talent, stifle innovation, and increase legal risk. In contrast, ending non-compete agreements can lead to increased employee satisfaction, improved industry reputation, and a more competitive and innovative marketplace.

Proposed FTC Rule

In response to the negative effects of non-compete agreements, the FTC has proposed a new rule that would restrict their use. The proposed rule would prohibit employers from using non-compete agreements with low-wage workers, workers who are not privy to trade secrets, and workers who are laid off or terminated without cause. The rule would also require employers to disclose the terms of any non-compete agreement before a worker is hired.

The proposed FTC rule has received support from a variety of sources, including labor unions and employee advocacy groups. They argue that the rule would protect workers' rights and promote fair competition in the marketplace. On the other hand, some business groups have criticized the rule, stating that it would limit their ability to protect their business interests and make it more difficult to retain top talent.


Non-compete agreements have become a controversial issue, with increasing evidence suggesting that they do more harm than good. The proposed rule by the FTC would restrict the use of non-compete agreements, thereby protecting workers' rights and promoting a more competitive and innovative marketplace. While there are concerns that this may limit employers' ability to protect their business interests, the proposed rule strikes a balance between the interests of employers and employees.

Employers should take a closer look at the negative impacts of non-compete agreements and consider alternative ways to protect their business interests. By prioritizing employee well-being and promoting a more competitive marketplace, employers can create a positive work environment that benefits everyone involved.


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