50 Labor & Public Interest Groups Led by Open Markets Support a Complete Ban on Non-Competes & Similar Contracts
FOR IMMEDIATE RELEASE: April 19, 2023
CONTACT: Ashley Woolheater, woolheater@openmarketsinstitute.org
50 Civil Society Groups Have Submitted a Joint Comment to FTC Urging the Agency to Ban All Non-Competes Under the FTC’s Current Rulemaking
WASHINGTON - The Open Markets Institute today led a coalition of fifty civil society groups that urged the Federal Trade Commission (FTC) to ban non-compete clauses as well as functionally equivalent restraints such as training repayment agreement provisions (or TRAPs), for all workers. Since the FTC proposed to prohibit non-compete clauses in January, it has received tens of thousands of comments on the harms of non-competes to workers all across the American economy.
“Firms use non-compete clauses as a substitute for other means of retaining workers, such as good working conditions, high wages, and the opportunity for future raises and promotions. In the absence of restrictions on labor mobility, evidence shows that firms do in fact switch to these alternative methods of worker retention. A prohibition on non-compete clauses would have benefits for all workers and especially pronounced benefits for women and people of color and contribute to the narrowing of gender and racial income gaps,” the groups’ joint comment reads.
Employers across a range of industries require workers to accept a non-compete clause as a condition of employment. These unfair contracts deprive tens of millions of workers of the freedom to switch jobs or to start a business in the same line of work or industry after they leave their current job. Amazon, for example, previously prohibited warehouse workers from working for a competitor of the retail giant anywhere for 18 months after leaving. Non-competes currently bind workers in a variety of industries and vocations, including camp counselors, engineers, journalists, fast food workers, hair stylists, physicians, yoga instructors, and others.
In March 2019, the Open Markets Institute spearheaded a petition joined by Public Citizen, the AFL-CIO, SEIU, many other labor unions and public interest groups, and more than 40 scholars, calling on the FTC to enact a regulatory prohibition on non-compete contracts. Open Markets and its partners repeatedly and successfully called on the FTC to act. Since the rulemaking was announced in January, Open Markets has written in favor of a complete ban on non-compete agreements and agreements like them.
Read the Comment Letter here.
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