More than 30 million Americans have signed employment contracts that limit their ability to switch jobs to a competing company, and those contracts are regulated by laws in 47 states.
The Federal Trade Commission (FTC) swept all of that aside in one fell swoop this week, as the commission voted down party lines to ban future noncompete agreements and to block the enforcement of many of those existing contracts. (The retroactive ban on noncompete agreements does not apply to senior-level employees.) Even for an agency that has sought in recent years to stretch its regulatory reach, the new FTC rule banning noncompete agreements is a stunning expansion of federal power—one that courts almost certainly will be asked to rein in.
