Two days ago, on April 23, the Federal Trade Commission made a radical ruling that changed the shape of the job market in the U.S. The commission officially outlawed noncompete clauses nationwide, a change set to radically alter the job field for hundreds of thousands of Americans, Wyomingites included, going forward.

What's a Noncompete Clause?

A noncompete clause is exactly as it sounds—a clause that prevents employees from competing against their current or past employer. The legally binding agreement is a contract specifying a time frame post-employment during which an employee may not enter into competition with an employer, either by starting their own business or working for a competitor.

What Does Banning Noncompete Clauses Do in Practice?

For many workers, noncompetes constrict their upward mobility in the job field. They are unable to move jobs at another company for pay or position improvements. Should they move to work with a competitor, their previous company can take legal action to prevent the job—an action that may include fines or the inability of the former employee to work at their new job.

"Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned,” said FTC Chair Lina M. Khan. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”

Credit: Federal Trade Commission
Credit: Federal Trade Commission

Banning noncompetes, then, allows for more mobility in the employee's job prospects. The FTC also notes that it should improve the job market for employees, promote competition between companies, increase wages, and force companies to be more competitive with their benefits.

The FTC's press release regarding the ban expects the action to "lead to new business formation growing by 2.7% per year" and "result in higher earnings for workers, with estimated earnings increasing for the average worker by an additional $524 per year, and it is expected to lower health care costs by up to $194 billion over the next decade." This ultimately means better job prospects and benefits for Wyoming workers and workers across the country.

When Does the Nocompete Ban Go Into Effect?

The final rule goes into effect 120 days after it is published in the Federal Registrar. For more information on the ban, visit the FTC announcement by clicking here.


Staff in the Office of Technology. (2024, April 23). FTC announces rule Banning noncompetes. Federal Trade Commission.

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