January 09, 2020

Wyden Supports Proposed FTC Rule Limiting The Use Of Non-Competes

In a bipartisan letter to the FTC, the senators urged the limiting of non-compete agreements that harm American workers

Washington, D.C. – U.S. Senator Ron Wyden, D-Ore., today joined a bipartisan group of senators to urge the limiting of non-compete agreements that harm American workers.   

In a bipartisan letter to the Federal Trade Commission (FTC), the senators wrote, “The American workforce has experienced significantly reduced job mobility, tepid wage growth, and declining rates of entrepreneurship in recent decades. At the same time, non-compete clauses have become more prevalent.”

The senators continued, “Non-compete clauses also hinder entrepreneurship, as research shows that the use of non-competes leads to fewer startups, and firms that start in states that enforce non-compete clauses are more likely to fail.”

This week the FTC will hold a workshop to “examine whether there is sufficient legal basis and empirical economic support to promulgate a Commission Rule that would restrict the use of non-compete clauses in employers-employee employment contracts.

The senators concluded, “The FTC has a duty to reduce or eliminate anti-competitive and deceptive acts. We believe that the broad use of non-compete clauses in the American economy is anti-competitive and workers are often bound to these clauses through deceptive practices. We appreciate that the Commission is seriously looking at non-compete clauses, and ask you ultimately act to limit their use.”

Data shows that an alarming 40 percent of American workers have been constrained by a non-compete agreement at some point in their careers. Employers are sometimes non-transparent with non-competes and their use results in lower wages.

Joining Wyden on the letter are U.S. Sens. Chris Murphy, D-Conn., Richard Blumenthal, D-Conn., Todd Young, R-Ind., Sherrod Brown, D-Ohio, Tina Smith, D-Minn., Tim Kaine, D-Va., Chris Van Hollen, D-Md., and Ben Cardin, D-Md.

A copy of the letter to the FTC is available here.