The FTC narrowly decided on Tuesday to outlaw almost all noncompetes, which are contracts that usually prohibit employees from joining rival companies or starting their own.
In the months preceding the vote, the FTC received almost 26,000 public comments. Chair Lina Khan mentioned a few of the employee anecdotes on Tuesday.
"We heard from employees who, because of noncompetes, were stuck in abusive workplaces," she stated.
The stories, she added, "pointed to the basic reality of how robbing people of their economic liberty also robs them of all sorts of other freedoms."
According to the FTC, one in five American workers, or around 30 million people, ranging from lowest wage earners to CEOs, are subject to noncompete agreements.
It claims that by enabling workers to shift employment freely, the legislative reform might result in increased pay of approximately $300 billion annually.
The group has been vehemently opposing the prohibition for more than a year, arguing that noncompete agreements are essential for both employers
The U.S. Chamber's president and CEO, Suzanne P. Clark, stated in a statement that "this decision sets a dangerous precedent for government micromanagement of business and can harm employers, workers, and our economy."
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