FTC Plan to Ban Noncompete Clauses Shifts Companies’ Focus

Businesses and lawyers are beginning to assess what the Federal Trade Commission’s proposed ban of noncompete clauses in employment contracts could mean for worker mobility, wages and the way future compensation agreements are structured. While a full or partial ban could expand the pool of potential hires, it would also weaken a tool that employers have come to rely on to retain talent and protect trade secrets and other proprietary information, lawyers say. More companies likely would turn to a patchwork of alternative mechanisms to keep people from leaving and taking valuable information with them, including non-disclosure agreements and employment contracts that reward longevity, they say.

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