Non-competes give a job a contractual afterlife, requiring that the employee agree not to work for a competitor or start a competing business for a defined period of time—often a year—and sometimes in a defined location.“By design, noncompetes often close off a worker’s most natural alternative employment options: jobs in the same geographic area and professional field,” FTC Chair Lina Khan wrote in a statement(Opens in a new window) joined by Commissioners Alvaro Bedoya and Rebecca Slaughter.“These restrictions can undermine core economic liberties, burdening Americans’ ability to freely switch jobs.”The proposed rule estimates that non-competes today hinder about 30 million American workers, or one in five overall, and that banning them “would increase American workers’ earnings between $250 billion and $296 billion per year.” It would therefore ban employers from asking employees to accept non-compete clauses and require them to rescind existing non-competes by 180 days after publication of the finished rule.President Biden’s July 9, 2021 executive order(Opens in a new window) on competition policy—which has already pushed regulatory agencies to consider right-to-repair policies and led the FTC to request public input on its approaches to digital mergers—tasked the FTC to address non-competes.Multiple economic studies (for instance, a 2005 paper(Opens in a new window) for the National Bureau of Economic Research) have found that the resulting freedom to change jobs and launch startups helped(Opens in a new window) make Silicon Valley more innovative and competitive."