What’s non-compete clauses and why is it a big deal that it’s banned?

Question

I see that the FTC banned it and (from what I see) it seems like a good thing. Why?

In: Economics

Answer 1

For instance, consider a physician in private practice who works at five local hospitals. If they lose their job or are terminated, they may be restricted from working within a certain radius (e.g., a specific number of miles) from each of these hospitals for a specified period, as per their contract. This is an example of a non-compete clause. Similarly, a tech worker employed by a consulting firm may be prohibited from joining any of their clients’ companies if they lose their job with the consulting firm, to prevent them from leveraging their professional connections and expertise to compete with their former employer.