April 21, 2023

Wyden, Merkley, Colleagues Support FTC Proposed Rule to Limit Noncompete Agreements

Washington, D.C. – U.S. Senators Ron Wyden, Jeff Merkley and Senate colleagues today urged the Federal Trade Commission (FTC) to move forward with a proposed rule banning noncompete agreements to give people in Oregon and nationwide the opportunity to change jobs and create new businesses.

“We urge the agency to resist calls for additional postponement and act quickly to protect as many workers under this rule as possible,” Wyden, Merkley and colleagues wrote in a letter to FTC Chair Lina Khan. “This rule is an important step to ending abusive practices in the labor market, and we support the FTC’s efforts to give workers the voice, dignity, and power they deserve.”

In January 2022, the FTC proposed a rule to ban noncompete agreements, but has faced aggressive pushback from corporate interests who have threatened litigation against the agency on the issue. Noncompete agreements restrict one in seven workers and frequently target employees earning $20 an hour or less, leading to stagnated wages and restricting workers’ opportunities to find new and better jobs. 

In the letter, the senators highlight findings from the Federal Reserve of Minneapolis, which illustrate “that ‘non-compete contracts limit our economy’s potential’ by making it more difficult for employers and entrepreneurs to recruit new workers or start new businesses.” 

“Studies have repeatedly shown that following bans on noncompete agreements, wages went up – not just for workers under these agreements, but across the board,” the senators continued. “As President Biden said in his recent State of the Union address, banning noncompete agreements will mean ‘companies have to compete for workers and pay them what they’re worth.’”

The senators conclude their letter by stating that the FTC has clear authority to promulgate rulemaking on unfair methods of competition and it is acting under its Congressional mandate by putting this rule forward.

The letter was led by U.S. Senators Elizabeth Warren, D-Mass., and Richard Blumenthal, D-Conn. Alongside Wyden and Merkley, the letter was signed by U.S. Senators Sheldon Whitehouse, D-R.I., Bernie Sanders, I-Vt., Chris Van Hollen, D-Md., Peter Welch, D-Vt., Ed Markey, D-Mass., Sherrod Brown, D-Ohio, Tammy Duckworth, D-Ill., Mazie Hirono, D-Hawaii.

The text of the letter is here.

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