78 signatories call for blanket prohibition on worker noncompetes; 49 seek ban on exclusionary contracting

To protect workers from these coercive contracts and independent businesses from exclusionary practices, Biden’s FTC must be prepared to enact rule-makings

WASHINGTON – The Open Markets Institute sent two letters today to President-elect Joe Biden requesting him to appoint commissioners to the Federal Trade Commission committed to using the agency’s power to prohibit noncompete clauses and exclusionary contracting by dominant firms. The letters also call on his administration to affirmatively endorse the agency’s use of its rule-making authority to prohibit unfair methods of competition in general.

The first letter, signed by 30 labor and public interest organizations and 47 scholars, demands Biden and his FTC ban worker noncompete clauses through a competition rule-making. The second letter, signed by 41 labor and public interest organizations and seven scholars, calls on them to prohibit exclusionary contracting by dominant firms through rule-making.

Both letters follow and affirm previously submitted petitions to the FTC.

In March 2019, more than 60 labor and public interest organizations and scholars submitted a petition to the FTC requesting a rule prohibiting noncompete clauses. In July 2020, more than 30 groups and scholars submitted a petition to the FTC asking it to enact a rule to prohibit dominant firms from using exclusive dealing and other exclusionary contracts.

From the noncompete letter:

“We believe banning noncompetes advances the commission’s mission of protecting workers, independent businesses, and consumers from unfair practices. We also know that you have consistently opposed noncompete clauses, stating that they inhibit workers from ‘reach[ing] their true potential without freedom to negotiate for a higher wage with a new company, or to find another job after they’ve been laid off[.]’”

From the exclusionary contracting letter:

“The FTC has long recognized the harms from exclusionary contracts. Over the past decade, it has brought a number of enforcement actions against monopolists for exclusionary contracting. These cases produced many settlements and the affirmance of a commission decision by the Eleventh Circuit. These enforcement efforts are commendable but not enough given the complicated, time-consuming character of antitrust litigation under the rule of reason today. We believe the commission should build on its litigation activities and enact a bright-line rule prohibiting exclusionary contracts by dominant firms.”

Read the full noncompete letter here.

Read the full exclusionary contracting letter here.

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