The Federal Trade Commission is attempting to ban noncompete agreements, which could potentially provide hundreds of thousands of workers with increased wages, benefits, and job opportunities. This move could have a significant impact on the job market, as many employees may consider leaving their current roles for better options. If the proposed rule is finalized, it could result in an unprecedented wave of job changes, according to Dan Kaplan of the recruitment and leadership firm Korn Ferry. Workers would be free to pursue opportunities with competitors or start their own businesses without fear of being sued by their employers. This could be a game-changer for many people, providing them with more freedom and better job prospects.
Since early 2021, workers have been leaving their jobs and changing roles at unprecedented rates. The number of resignations has decreased due to worries about the economy and increasing layoffs in some industries, yet the labor market is still very tight. If the Federal Trade Commission's proposed ban on noncompete clauses is implemented, it could give employees more confidence to switch jobs without fear of violating any agreements. This could lead to an uptick in job-switching, as well as an increase in new businesses and entrepreneurs.
Some recruiters believe that economic uncertainty might prevent workers from leaving their current positions, but others disagree. Grace Marlin of DG Recruit believes that noncompete agreements often hold people back from leaving their jobs, and if the ban is passed, a wave of resignations is likely. Shawn Cole of Cowen Partners also noted that those in revenue-generating roles such as sales, business development, and investment banking may be particularly eager to take advantage of their bargaining power.