FTC proposes ban on noncompete agreements: 8 notes for dental leaders

The Federal Trade Commission recently proposed a rule that would ban employers from imposing noncompete agreements on employees.

Eight things for dentists to know: 

1. The ban could increase wages by nearly $300 billion each year and expand career opportunities for about 30 million Americans, the American Dental Association said Jan. 13.

2. The rule would apply to independent contractors as well as anyone who works for an employer, whether paid or unpaid. 

3. The FTC estimates that noncompete agreements affect 18 percent of U.S. workers.

4. In addition to prohibiting employers from entering or attempting to enter noncompete agreements with workers, the rule would also make it illegal for employers to maintain a noncompete or represent to a worker that they are subject to a noncompete agreement under certain circumstances. Employers would also be required to rescind existing noncompete agreements.

5. The FTC said the proposal would not apply to other employment restrictions, except possibly those that are so broad they function as a noncompete agreement.

6. Noncompete agreements are possible contributors to stagnant wages and may also reduce competition and hurt productivity by making it more challenging for companies to hire the best workers. 

7. The FTC also estimated that a ban could save consumers up to $148 billion on health costs each year and could double the number of companies in the same industry founded by a former worker. It could also close racial and gender wage gaps by between 3.6 percent to 9.1 percent.

8. The FTC said Jan. 5 it is accepting public comments on the proposal until March 10. It will then use the comments and its own analysis to deliver a final rule.

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