U.S. agency considering rule reining in non-compete agreements for
workers
Send a link to a friend
[January 10, 2020]
WASHINGTON (Reuters) - The U.S.
Federal Trade Commission (FTC), one of two agencies that enforce
antitrust law, is considering a rule aimed at reining in corporations
from pushing employees to sign non-compete agreements that prevent them
from working for rival companies, officials said at a workshop on
Thursday.
The practice of requiring workers to sign an agreement barring them from
quitting for a similar job elsewhere appears to have begun among white
collar professions, like doctors and tech workers, and were aimed at
protecting trade secrets and encouraging training of workers. They have
since spread to low-wage jobs that require minimal training.
A famous non-compete dispute between the Illinois state attorney general
and the fast-food franchise Jimmy John's ended in 2016, when the chain
agreed not to enforce a prohibition on workers at its sandwich shops
taking jobs with competitors. The state had argued the non-compete
agreement was illegal.
![](http://archives.lincolndailynews.com/2020/Jan/10/images/ads/current/stclara_lda_SPONSOR_090519.png)
Commissioner Rebecca Slaughter, a Democrat on the FTC, said she had not
prejudged a decision on a rule but seemed skeptical of such agreements.
"We know that non-compete clauses can limit employee mobility and
competition even in states where non-compete clauses are legally
unenforceable," she said at the FTC workshop.
Any decision on a rule limiting corporate non-compete agreements would
be made by the agency's five commissioners, three Republicans and two
Democrats.
[to top of second column]
|
![](../images/011020pics/news_I17.jpg)
Federal Trade Commission seal is seen at a news conference to
announce that Facebook Inc has agreed to a settlement of allegations
it mishandled user privacy at FTC Headquarters in Washington, U.S.,
July 24, 2019. REUTERS/Yuri Gripas
![](../images/ads/current/fitzpatrick_lda_SPONSOR_2017.png)
Noah Phillips, a Republican commissioner, also seemed skeptical of
non-compete agreements because of their potential to reduce labor
mobility. However, he indicated he was reluctant to have the FTC to
tackle the issue due to a lack of specific authority from congress
or historical precedent for them to do so.
"Some stakeholders are pushing for the FTC itself to address
non-competes through a rule-making," Phillips said. "We heard a
little less however about the legal basis for doing so. This is a
real issue that gives me, someone who is concerned about
non-competes, pause."
A long list of states, including California, limit or ban the
agreements. Eighteen state attorneys general, including from
California, Illinois, Massachusetts and New York, urged the FTC in
July to stop the use of non-compete agreements, as well as
agreements between companies to not poach each others' workers.
(Reporting by Diane Bartz; Editing by Bill Berkrot)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2020/Jan/10/images/ads/current/pestcontrol_bch_termites.png) |