Many noncompete agreements that employers make staffers sign to bar them from leaving are a violation of labor law, the National Labor Relations Board says.
Many noncompete agreements that employers make staffers sign to bar them from leaving to take certain jobs with rivals or in nearby markets violate federal labor law, says one of the government’s most senior labor lawyers.
With her Tuesday memo, Abruzzo joined the Biden administration’s criticism of noncompete agreements and dialed up the fight with business groups who say the agreements are needed and can be reasonably used. Around 30 million workers are bound by the agreements and a ban letting workers freely move to another job could boost their collective wages by $50 billion annually, from around $250 billion to almost $300 billion, according to FTC projections.
“The idea of a chilling effect is fuzzier than direct retribution” for trying to unionize or improving pay and work conditions, he noted.The FTC rule is pending and the U.S. Chamber of Commerce has said it is prepared to sue the regulator to block a rule if necessary.
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