GET DAILY REPORT FREE
The Federal Trade Commission says its new ban on noncompete agreements could lead to a rise in entrepreneurship, estimating the new rule could lead to more than 8,500 new businesses being launched, Inc. reports.
“[M]any potential entrepreneurs wrote to the Commission to describe how they wanted to strike out on their own, but a noncompete prevented them from doing so,” the FTC writes in its sprawling 570-page rule issued on Tuesday.
In one instance, the FTC recounts how a veterinarian said they were forced to sell their home and leave their state because of a noncompete. The noncompete prevented this veterinarian from opening a practice within 30 miles of any of the four locations of the practice where they once worked.
The only exception carved out in the new rule applies to preexisting noncompetes for senior executives, who are defined as those earning an annual salary above $151,164 and who are in a “policy-making position.” Any new agreements for those holding that position, however, would be banned.
Read the full story from Inc. A subscription may be required.
