The Federal Trade Commission (FTC) recently voted 3-2 to ban noncompete agreements. The new rule goes into effect 120 days after the rule is officially published in the Federal Register. This decision will undoubtedly have a significant impact on both employers and employees alike. But what effect will the rule have on black entrepreneurs?

The FTC defines a non-compete agreement as, “a term or condition of employment that prohibits, penalizes, or functions to prevent a worker from (1) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition; or (2) operating a business in the United States after the conclusion of the employment that includes the term or condition.”

Historically, non-competes have been used to restrict employees from working in the same industry after leaving their former employer. Though the intention is to protect the intellectual property of businesses, non-competes have often negatively affected competition in product and service markets, especially with Black workers.

If written properly, most non-competes have outlined specific restrictions of a current or former worker, who can be their employer, where they can work for said employer, and for how long they are prohibited to work for an employer. These limitations can be unduly burdensome. Imagine being told who to work for and who not to work for.

Those who have signed non-competes and wish to increase their salaries, will either have to accept where they are or change industries and possibly, locations. These are all unnecessary hassles that restrict a competitive market and perpetuate wage suppression.

I have reviewed contractual agreements of several Black clients who I have worked with in a variety of areas, from tech to entertainment. Many of my clients desired to venture out or hang up their proverbial “shingle,” signaling the start of their own business, but have been deterred by these non-compete clauses.

Approximately 18 percent of the workforce, which is about 30 million people, is covered by non-compete agreements. In the Black community, there’s a saying that goes, “If a white person has a cold, then a black person has pneumonia.” What this essentially means is that if majority of Americans are suffering from a particular thing, that thing already has, currently is, or will be suffered much more by Black people. Here, if many Americans are experiencing the effects of wage suppression and restrictions in the market, then the Black community feels it worse. Add in Black workers who want to start their journey to entrepreneurship and it becomes an almost impossible task to accomplish.

FTC estimates that the impact of banning non-competes could increase worker pay by $300 billion and it can lead to 8,500 more new businesses each year. For Black entrepreneurs, the elimination of non-competes can now open the door to new innovations, creativity, and fairer competition in the marketplace. This ban can help business owners attract top talent, as there would be no restrictions on the mobility of skilled workers; thus, strengthening their businesses and enhancing their competitiveness.