Legal | 7 Ways the FTC Ban on Non-Competes Will Impact Companies Utilizing a Contingent Workforce

7 Ways the FTC Ban on Non-Competes Will Impact Companies Utilizing a Contingent Workforce

In a landmark ruling, the Federal Trade Commission (FTC) has voted to ban non-compete agreements for a wide range of American workers. The FTC's decision to ban non-compete agreements marks a significant shift in employment practices in the United States.

Nearly 1 in 5 US workers are estimated to be under some form of non-compete, which is why these agreements have been a contentious issue for a long time. While some argue for their necessity in protecting trade secrets and maintaining a stable workforce, critics highlight their potential to suppress wages and restrict job mobility.

By eliminating non-compete clauses for American workers, the FTC aims to promote greater labor market fluidity, creating jobs for nearly 30 million Americans and raising wages by approximately $300 billion per year. This is all in the hope of empowering employees to seek better opportunities without fear of legal repercussions.

While the debate surrounding non-compete agreements underscores the complex balance between protecting business interests and promoting worker rights and economic health, the outcome of these legal and regulatory battles will have far-reaching implications for both employers and employees across various industries.

If the ruling sticks, here are 7 outcomes you can expect to impact your contingent workforce management.

H2: 1. Increased Mobility & Negotiating Power For Workers

With non-compete agreements no longer enforceable, workers in the contingent workforce will have more freedom to switch between jobs and employers. This increased mobility could lead to a more dynamic labor market, with workers seeking opportunities that best suit their skills and preferences.

H2: 2. Engagement of Contingent Contracts Will Increase

Employers may need to become more reliant on contingent workers due to the ban. With non-compete agreements no longer in play, contingent workers will feel more confident exploring opportunities with different companies. This increased freedom could lead to a larger pool of available contingent workers for employers to engage with, providing greater flexibility in staffing and resource allocation.

H2: 3. Reliance on Workforce Management Technology and Partners

Employers will need to adopt more agile workforce management strategies in response to the ban. The absence of non-compete agreements means contingent workers will come and go more freely, requiring employers to adjust their staffing plans and resource allocation accordingly. Companies will need to invest in technologies and processes that enable them to quickly scale their contingent workforce up or down as needed.

H2: 4. Compliance Considerations and Upkeep

Employers will need to ensure that their contingent workforce management practices remain compliant with relevant regulations in light of the ban on non-compete agreements. This will involve reviewing and updating existing contracts and policies to remove any non-compliant clauses. Additionally, employers will need to stay informed about any legal developments or challenges related to the ban and adjust their practices accordingly to mitigate compliance risks.

H2: 5. Enforcement Challenges

Enforcement of the ban will present challenges, particularly in cases where employers attempt to circumvent the regulations or enforce non-compete agreements through other means. The FTC and other regulatory bodies will be developing mechanisms to monitor compliance and address violations effectively.

H2: 6. New Ways to Safeguard Company Information

The legal landscape surrounding employment agreements and intellectual property rights will need to change. Employers and legal professionals will need to adapt their strategies and policies to comply with new regulations and navigate potential legal challenges. Employers will need to explore alternative methods for protecting their intellectual property and trade secrets, such as confidentiality agreements or non-disclosure agreements.

H2: 7. Talent Acquisition and Retention

With non-compete agreements no longer restricting job mobility, employers will need to enhance their talent acquisition and retention efforts to attract and retain top contingent talent. This could involve offering competitive compensation packages, providing opportunities for skill development and career advancement, and fostering a positive work environment that encourages loyalty and engagement among contingent workers.

Overall, the ban on non-compete agreements will force employers to adapt their contingent workforce management practices to accommodate the changing landscape. By embracing agility, compliance, and talent-focused strategies, employers can navigate these changes by working with the right partner who can help them effectively capitalize on the opportunities presented by a more fluid labor market.

For more of the latest news in contingent workforce management check out CXC Global’s podcast and blog. If you need a partner to help you navigate the oncoming tide of changes, reach out to our team.

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By Phillip Solis, Business Development Manager, CXC

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T. +1800 588 0292 M. +1 971 430 4007

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With over a decade deeply involved in the EOR and Contingent Workforce sectors, Phillip Solis is your seasoned guide to national & global expansion. As an Account Executive at CXC Global, Phillip brings his wealth of experience to help US-based companies break through traditional boundaries with precision and ease.

Phillip's practical approach and deep industry insights allow him to create customized solutions that perfectly fit his clients' needs. By fostering collaboration and building lasting relationships, he becomes a trusted partner in achieving organizational greatness. Phillip's dedication to delivering real, measurable results is evident in his constant drive for innovation and putting clients first.

In a rapidly changing landscape, Phillip Solis provides a steady hand and strategic direction, helping businesses chart their course through the complexities of global expansion. As an Account Executive, he's not just a guide but a reliable ally on your journey to success.


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CXC helps clients optimize their Global Contingent Workforce programs. Represented in 100+ countries, we continuously deliver borderless talent solutions. CXC pioneered and leads the way in global contingent workforce management solutions and is supported by a proven history in compliance and innovation relating to contractor management. Truly vendor neutral, CXC is focused on optimizing talent recruitment channels, ensuring optimum workforce compliance and cost efficiency.