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AMNA NAWAZ: The Federal 
Trade Commission today 
issued a proposal banning 
noncompete clauses

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that prevent workers from 
switching employers or 
starting a new business.

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About one in five Americans, 
approximately 30 million 
people, are affected by these

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policies. The FTC will accept 
public comments for 60 days 
before it can finalize the rule.

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Elizabeth Wilkins, director 
of the Office of Policy 
Planning for the FTC,

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has worked on this 
proposal, and joins me now.

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Welcome.

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ELIZABETH WILKINS, 
Office of Policy Planning 
Director, Federal Trade 
Commission: Thank you.

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AMNA NAWAZ: Thanks 
for being here.

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So, most people think of 
noncompetes and associate 
them with high-paying jobs,

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tech workers and so on. 
But what are some of the 
industries and the jobs

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that we don't typically 
associate with noncompetes 
that are impacted by this?

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ELIZABETH WILKINS: Absolutely.

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You're totally right. People 
sort of think of folks in the 
boardroom who might be impacted

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by these, but 30 million 
Americans we think are 
covered by noncompetes.

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So that's everybody from minimum 
wage workers, security guards, 
folks who are flipping burgers,

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to middle-wage workers, 
journalists, nurses. All kinds 
of folks are impacted by this.

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AMNA NAWAZ: And about 
half of all states 
already have some kind of

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rules on the books either 
limiting their use or 
outright banning them.

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So, I guess the question 
is, why is a federal 
rule necessary right now?

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ELIZABETH WILKINS: One 
part is that you just said,

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there are a couple states 
that fully ban noncompetes 
already, but not all of them do.

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And one of the really 
interesting and, frankly,

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sort of disturbing pieces of 
evidence that we have is that, 
in states that ban noncompetes,

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you actually see them in just 
as many contracts as states that 
don't. That means workers don't

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know what their rights are. 
And workers may be chilled from 
trying to find another job,

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getting a better-paying 
job, even when those 
clauses are unenforceable.

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So, a clear federal rule 
would go a long way to 
making sure that people

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can actually switch 
jobs, find better pay and 
better working conditions.

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AMNA NAWAZ: So, if this 
proposal moves forward,

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what do you estimate 
could be the potential 
impact on worker wages?

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ELIZABETH WILKINS: Pretty big.

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Right now, this is a 
proposal, but we preliminarily 
find that there could

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be an increase in wages of 
$250 billion to $300 billion 
for workers who, again,

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can find better wages 
and working conditions 
and where employers would

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have to really compete for 
those workers, instead of 
preventing them from moving.

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AMNA NAWAZ: But you 
look at workers are now, 
especially over the last 
two years, moving through

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the pandemic, right, we have 
seen unusually high rates of 
quitting and also job-switching.

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Numbers from November of 
2021 suggest some 4.5 million 
workers have voluntarily left

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their jobs. Those numbers seem 
to suggest that noncompetes 
aren't really an issue. They're

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not an impediment to 
worker mobility, right? 
So what kind of immediate 
impact might this have?

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ELIZABETH WILKINS: We have 
seen sort of an unprecedented 
switching in the wake

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of the pandemic. This is 
one big shock to the labor 
-- to the labor market.

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But we're talking about 
a long-term effect, if 
we can remove noncompetes 
from these clauses. We

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are hoping that this is 
good long term for the 
productivity of the economy,

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when workers can match 
with the jobs that they're 
best suited to. That's 
good for employers also.

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And, again, this means that, 
as we have seen in this moment,

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employers will have to 
compete, based on wages and 
benefits for their workers.

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AMNA NAWAZ: In this 
market right now, it's a 
top -- tight job market,

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right? Workers have a lot of 
leverage. If you don't want 
to take a job where there

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is a noncompete, can't 
you just not take that 
job, go find another one?

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ELIZABETH WILKINS: 
That's the ideal.

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Some of the research 
suggests that workers don't 
even know that they're 
signing a contract with a

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noncompete clause. When you 
start a job, your first day, you 
get a stack of H.R. paperwork.

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You may or may not know 
what's in it. Some workers 
are asked to sign a 
noncompete after they start.

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So this is a problem even for 
well-educated employees. They 
don't know what they're signing,

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and they don't know what 
they're signing up for,

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until they try and get 
another job, and they 
find out that they can't.

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AMNA NAWAZ: There are 
studies that show states 
that restrict noncompetes

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do see higher wages. 
There's some competing 
research too, though.

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Some suggest that noncompetes 
actually spur job creation 
in some start-ups,

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that they leave firms 
to want to invest in the 
people that they hire,

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so that they don't go somewhere 
else. What do you say to that?

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ELIZABETH WILKINS: 
That's totally right.

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We sort of acknowledge in our 
proposal that there are some 
good reasons that employers

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might want to use noncompetes. A 
couple of things. First of all,

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employers have alternatives. 
There is nondisclosure 
agreements if they're

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worried about sort of 
information or trade 
secrets. There's also 
trade secret law. There

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are thousands of lawsuits 
under trade secret law that 
are brought every year.

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And then the other is, 
obviously, if workers 
aren't restricted,

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employers can say, you know 
what? I will offer you more,

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I will offer you better for 
you to stay because this 
investment is worth it.

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AMNA NAWAZ: It is a proposal. 
There are some suggesting it's

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very vague and that it 
could face legal challenges. 
Do you anticipate that?

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ELIZABETH WILKINS: We 
think we have really clear 
authority here to promulgate 
this kind of a rule.

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Congress gave us authority, and 
I think actually we feel fairly 
obligated to make sure that,

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if we have this authority 
to prevent unfair methods of 
competition like this in a place

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that's appropriate, like 
when there's economy-wide 
harm, that we should use it.

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AMNA NAWAZ: Elizabeth Wilkins,

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director of the Office of 
Policy Planning from the FTC, 
thank you for joining us.

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ELIZABETH WILKINS: 
Thanks so much.