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FTC plans to ban non-compete clauses change companies’ focus

Businesses and lawyers are beginning to consider what the Federal Trade Commission’s proposed ban on non-compete 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 employers have come to rely on to retain talent and protect trade secrets and other proprietary information, lawyers say. More companies are likely to turn to a patchwork of alternative mechanisms to keep people from leaving and taking valuable information with them, including nondisclosure agreements and employment contracts that reward longevity, they say.

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