FTC Holds Forum on Proposed Non-Compete Clause

Federal Trade Commission seal is seen at a news conference at FTC headquarters in Washington, on July 24, 2019. (Yuri Gripas/Reuters)

The Federal Trade Commission (FTC) is hosting a public forum to examine its proposed ban on non-compete clauses.

The virtual forum will be held from 12 p.m. to 3 p.m. EDT on Feb. 16 and will be broadcast on the FTC’s website, transcribed, posted online, and made part of the public record.

According to the commission’s Feb. 2 press release, the event will provide individuals an opportunity to voice their experiences with non-competes in the workplace.

A non-compete clause is an agreement an employee signs stating they will not engage in a business that competes with the employer’s business when they are no longer employed by said company.

“Companies impose non-competes on workers across industries and job levels, from hairstylists and warehouse workers to doctors and business executives,” the FTC’s press release stated. “Evidence indicates that non-competes hurt workers and harm competition by blocking workers from pursuing better opportunities and by preventing employers from hiring the best available talent.”

The commission will hear from a number of speakers who have experienced non-compete agreements, as well as business owners who have dealt with the practice in their businesses. Then, members of the public will be able to comment via live stream. Individuals who wish to speak can sign up to talk through a web form and will be heard in the order in which they sign up within the time allotted.

According to the commission, “The FTC’s proposed rule generally would prohibit employers from using non-compete clauses, including independent contractors and anyone who works for an employer, whether paid or unpaid. Among other things, the rule would also require employers to rescind existing non-competes and actively inform workers that they are no longer in effect.”

Sen. Elizabeth Warren spoke in support of the proposed move, saying she believes the FTC is right to work on implementing the rule.

“It’s time to ban non-competes,” Warren said on Twitter a few weeks after the FTC’s initial Jan. 5 announcement about the proposal. “Companies are boosting their profits by $300 billion each year by trapping millions of American workers in their jobs, suppressing wages and competition. Enough is enough.”

However, the U.S. Chamber of Commerce is against the possible change. In a Wall Street Journal opinion piece, Chamber CEO Suzanne Clark said the group will “oppose the proposed regulation with all the tools at our disposal, including litigation.”

Clark called out the FTC for government overreach saying, “If the FTC can regulate non-compete agreements without authorization from Congress, there is no aspect of employment or commercial arrangements that it doesn’t have the authority to regulate or ban arbitrarily.”