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

Lets say you get a job at a car repair shop, and they have you sign a non-compete. If it was enforceable, you wouldn’t be able to go work for any other car repair shops, and as your work skills mostly have to do with repairing cars, you likely have to take a job you don’t have established skills for, and make less money.

Basically, it’s a way for shady employers to lock their employees in, when they’d be able to earn more at another employer in the same industry.