This piece was originally published in The Hill.
The Federal Trade Commission recently proposed a rule that would ban non-compete clauses in employment contracts. While the Commission’s attempt to ban them raises important questions about the continued use of NCAs, its assertion of authority will be challenged and is unlikely to survive judicial review.
The FTC’s proposal is simple to understand: most NCAs are presumptively anticompetitive and are banned. The rule applies to all future employment contracts along with those currently in existence.
The debate over NCAs is important, especially regarding the circumstances and occupations in which they may be inappropriate, but it belongs with the elected branches of government, not a federal agency or independent commission. By taking the lead on this issue, the FTC may have spurred discussion, but has interrupted the critical ongoing discussion within Congress. In early 2021, for example, a bipartisan group of representatives and senators introduced the Workforce Mobility Act of 2021. While far from perfect, the act would have banned most NCAs and provided some exceptions, most of which focused on permitting them to individuals winding down or dissolving businesses.