Senators Warren & Markey Support FTC Proposed Rule to Limit Noncompete Agreements

In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock photo)

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WASHINGTON DC – U.S. Senators Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.) and Representatives Pramila Jayapal (D-Wash.), Annie Kuster (D-N.H.), Ilhan Omar (D-Minn.), and Don Beyer (D-Va.) led over 60 of their colleagues in a letter to Federal Trade Commission (FTC) Chair Lina Khan, urging the agency to move forward with their proposed rule banning noncompete agreements to give approximately 30 million Americans the opportunity to change jobs and create new businesses.

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. Noncompetes 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. 

“We urge the agency to resist calls for additional postponement and act quickly to protect as many workers under this rule as possible,” wrote the lawmakers. “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.”

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The letter highlights 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,” wrote the lawmakers. “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 letter notes that following extensive research on the impacts of noncompete agreements, the Commission has correctly identified that state-level and case-by-case adjudication are insufficient. The FTC has clear authority to promulgate rulemaking on unfair methods of competition under Section 5 of the FTC Act, and it is acting under its Congressional mandate by putting this rule forward.

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The letter was also signed by Senators Sheldon Whitehouse (D-R.I.), Bernie Sanders (I-Vt.), Chris Van Hollen (D-Md.), Ron Wyden (D-Ore.), Peter Welch (D-Vt.), Ed Markey (D-Mass.), Sherrod Brown (D-Ohio), Jeff Merkley (D-Ore.), Tammy Duckworth (D-Ill.), Mazie Hirono (D-Hawaii); and Representatives Pramila Jayapal (D-Wash.), Annie Kuster (D-N.H.), Ilhan Omar (D-Minn.), Donald Beyer (D-Va.), Becca Balint (D-Vt.), Nanette Diaz Barragàn (D-Calif.), Jamaal Bowman (D-N.Y.), César Chávez (D-Ariz.), Yvette Clarke (D-N.Y.), Chris De Luzio (D-Pa.), Mark DeSaulnier (D-Calif.), Debbie Dingell (D-Mich.), Valerie Foushee (D-N.C.), Jesus “Chuy” García (D-Ill.), Robert García (D-Calif.), Jared Huffman (D-Calif.), Summer Lee (D-Pa.), Seth Magaziner (D-R.I.), Jerrold Nadler (D-N.Y.), Donald Norcross (D-N.J.), Eleanor Holmes Norton (D-D.C.), Alexandria Ocasio-Cortez (D-N.Y.), Marie Gluesenkamp-Perez (D-Wash.), Mark Pocan (D-Wis.), Katie Porter (D-Calif.), Jamie Raskin (D-Md.), Adam Schiff (D-Calif.), Rashida Tlaib (D-Mich.), Jill Tokuda (D-Hawaii), Lori Trahan (D-Mass.), Bonnie Watson Coleman (D-N.J.), and David Cicilline (D-R.I.).

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