The FTC is proposing a ban on non-compete agreements, arguing they restrict competition. This could have major implications for Wall Street, where non-competes are commonly used to retain talent with proprietary knowledge. Industry groups oppose the ban, but California already restricts non-competes and New York recently tried.
If enacted, the ban may lead to more workers switching firms and bidding wars for top talent. Banks could increase compensation and stock awards to encourage loyalty absent non-competes. Legal challenges are likely from businesses claiming the FTC lacks authority. But either way, banks should evaluate compensation and culture to retain dissatisfied employees in a free agent scenario.
While non-competes help protect secrets, alternatives like non-disclosure and non-solicitation pacts would still bind workers. The FTC proposal signals a power shift toward employees in an already tight labor market. Wall Street must strategize to attract and keep talent even if non-competes disappear.
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