Federal Trade Commission Chair Linda Khan hosted a public forum on a new rule proposed to ban employers from imposing non-compete clauses on their workers.
“This one-size-fits-all proposal is unworkable and has the power to allow for trade secrets and other trade secret information to be given away to competitors and foreign adversaries by employees,” Brian Walsh, Director of Labor and Employment Policy at the National Association of Manufacturers, said, according to an FTC press release.
The forum held on Feb. 16 provided an opportunity for executives, investors, business owners, and others to give feedback on the proposed rule, the release reported.
Khan said the assumption had long been held that non-competes applied mainly to high-level executives with access to sensitive corporate information, according to the release. But she said their use has significantly expanded in the past few decades. One in five American workers now are bound by non-competes across income and job levels. She shared that the FTC estimates the proposed non-compete rule could increase workers’ earnings by $250 billion to $296 billion dollars.
Steam Logistics President Steve Cox said a company or lobbyist insisting on a non-competition agreement to protect their company is false. Non-disclosures and non-solicitation agreements will adequately protect their interests, he said in the release.
Johnna Torsone, who served as chief HR officer and a member of the senior management team at Pittney Bowls, had a different opinion, according to the release. Non-competes can protect companies’ vital investments and their employees if reasonable in scope and duration. They ensure research security and development trade secrets, critical strategic plans and institutional knowledge, the Human Resources Policy Association said. Torsone said that she and the association opposed the “blanket restriction” on non-competes.
Bloomberg Law reported that the FTC already has 5,000 public comments regarding the non-compete proposal. The commission will continue accepting submissions until March 20.
The U.S. Chamber of Commerce believes the FTC is overstepping its statutory bounds and will sue if the Non-Compete Ban rule goes into effect, Bloomberg Law reported.
