FTC Pressed to Crack Down on Noncompetes

Democratic senators want new rules limiting clauses
Author:
Publish date:
Updated on
FTC building, "Man Controlling Trade" sculpture

More than a half dozen Democrats have asked the Federal Trade Commission to take the point on noncompete clauses and issue a rule limiting their use. The clauses have long been a standard for broadcast employees, particularly on-air employees in which a company invests to build a brand, though a number of states have passed laws to limit them.

Sen. Richard Blumenthal (D-Conn.), a big critic of the clauses, led a group of six colleagues to call for the rule in a letter to the FTC Wednesday (March 20).

The letter to FTC Chairman Joseph Simons backstops a petition for rulemaking filed by a coalition of unions, consumer groups and others seeking a prohibition on the clauses.

The senators see the clauses as undercutting leverage for workers to negotiate for better wages or working conditions.

"Powerful companies have forced workers in almost every industry – from the drilling rig business, to sales and marketing, to sandwich making – to sign these insidious little clauses," they said. "In all, an estimated 30 million American employees and independent contractors are currently subject to a non-compete clause."

Legislation has been introduced, but the senators clearly recognize that a faster route in a divided Congress would be by FTC fiat, though the FTC's rulemaking authority is another bone of contention, so neither route is any fast track.

In addition to Blumenthal, signing on to the letter were Sens. Ben Cardin (D-Md.), Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass.), Edward J. Markey (D-Mass.), Chris Van Hollen (D-Md.), and Amy Klobuchar (D-Minn.).

Currently, workers are suffering serious anti-competitive harms from the proliferation of non-competes in the economy. It is not enough that the Federal Trade Commission shares our concerns about these actions. It must act decisively to address them.

They want a response within 30 days.

Related