The Federal Commerce Fee voted 3-2 this week to ban noncompete agreements. Whereas the FTC estimates that just about one in 5 American staff is topic to a noncompete, these agreements haven’t been an enormous concern in Silicon Valley, as a result of they’re not enforceable in California.

This has arguably been one of the region’s competitive advantages, because it permits staff to start out one thing new with out worrying (normally) that they’ll need to spend the subsequent few years battling their outdated employer in courtroom.

With this ban, the FTC might give staff throughout the US that very same freedom. In truth, the fee claims this may result in the creation of 8,500 new startups yearly, in addition to 17,000 to 29,000 further patents in a median 12 months.

Some caveats: This rule solely applies to noncompetes, not non-disclosure agreements, so former staff can nonetheless get into authorized scorching water if their outdated firm accuses them of spilling commerce secrets and techniques. And whereas the FTC says most present noncompetes will now not be enforceable, present noncompetes for senior executives will nonetheless maintain.

Most importantly, the U.S. Chamber of Commerce says it would sue the FTC over the rule, arguing that the fee doesn’t have the authorized authority to concern this sort of regulation.

Hit play, then let me know what you suppose! (And for those who’re pining on your Alex Wilhelm, worry not: He’ll be again internet hosting the For Millionaires Minute subsequent week.)