MICHEL MARTIN, HOST:
Noncompete agreements - those are those employment agreements that prevent workers from taking a new job with a competitor or starting a competing business. There's a good chance that you or someone you know may be bound by one, but now they may be coming to an end. NPR's Andrea Hsu has more.
ANDREA HSU: Noncompetes are everywhere in America. An estimated 30 million workers have them, from janitors and security guards to doctors and CEOs. Companies say they're vital for protecting investments and trade secrets. But this week, the government is saying no more. In a 3-to-2 vote yesterday, the Federal Trade Commission approved a rule that bans noncompetes in nearly all jobs. Lina Khan, the Commission's chair, shared a few of the 26,000 comments submitted by the public.
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LINA KHAN: We heard from employees who, because of noncompetes, were stuck in abusive workplaces. We heard from physicians who served underserved areas of the country who explained how noncompetes restricted their ability to continue serving their patients.
HSU: One worker described how after a merger, they had issues with their company's religious principles. Because of a noncompete, that worker was stuck there. The rule prohibits new noncompetes and makes most existing ones unenforceable. There is one exception for senior executives, the rationale being they are more likely to have negotiated the terms of their agreements. Voting against the rule were the Federal Trade Commission's two Republicans - first, Andrew Ferguson.
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ANDREW FERGUSON: I do not believe we have the power to nullify tens of millions of existing contracts and to declare those contracts unlawful across the whole country, irrespective of their terms, conditions, historical contexts and competitive effects.
HSU: The other Republican, Melissa Holyoak, went as far to say the rule was unlikely to survive a legal challenge. And legal challenges are coming. The U. S. Chamber of Commerce has vowed to sue the Commission, calling its rule a blatant power grab.
Andrea Hsu, NPR News.
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