Open Markets Institute Testifies in Support of Minnesota Non-Competes Ban

Open Markets Chief Economist Brian Callaci delivered testimony in support of Minnesota’s non-competes ban, which was made law in 2023. His testimony to the Minnesota State House Workforce, Labor, and Economic Development Finance and Policy Committee highlighted the benefits of Minnesota’s ban on non-compete clauses for workers across the income spectrum as well as for the labor market and for fair competition our markets.

Excerpts:

“Minnesota’s non-compete law, passed in 2023, is major step forward to eliminate these pernicious contracts for all workers, irrespective of their income, line of work, or employment classification. It safeguards the rights of workers, consumers, and small business owners in the event the FTC’s final rule is struck down by a court, and provides workers additional enforcement channels to the FTC’s administrative process.”

“Whereas the harms from non-competes are real and well documented, the justification for these contracts is unpersuasive. Given the documented injuries to workers from non-competes and the specious employer justifications for their use, a categorical ban on these contracts is the correct policy. Minnesota’s current non-compete law does just that. It should maintain this universal approach and not include any carveouts tied to income, line of work, or employment status. “

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In March 2019, the Open Markets Institute led a coalition of civil society organizations, labor unions, legal experts, and economists that formally petitioned the Federal Trade Commission to use its authority under the FTC Act to issue a rule prohibiting non-compete clauses in labor contracts as an unfair method of competition that is per se illegal. The petition successfully called for an FTC rule that would make non-compete clauses illegal for all workers. Since then, Open Markets has written and testified extensively in defense of the FTC’s and states’ bans on non-compete clauses.