Senate and House Democrats sent a letter to Federal Trade Commission Chairman Lina M. Khan on Tuesday, asking the agency to implement the proposed ban on non-compete agreements “without delay” and to keep the rule as broad as possible.
ftc extension he announced in January, plans to ban employers from using such contracts to lock workers into their jobs and prevent them from accepting better offers elsewhere. Antitrust and consumer protection agency declared transactions are a method of unfair competition in violation of the Federal Trade Commission Act.
The proposal drew applause from progressives and labor groups, as well as backlash from business lobbies such as the US Chamber of Commerce, which called it “blatantly illegal.” Until Wednesday, the agency will accept public comments that can be factored into any changes to its initial proposal.
Led by Sens. Elizabeth Warren (Mass.) and Richard Blumenthal (Conn.), the 64 lawmakers urged the FTC to stand firm and “resist calls” from companies to delay the rule or add restrictions and instead “act quickly to protect as many as possible. workers subject to this rule” as much as possible. The original proposal does not limit the ban to certain sectors or exclude high incomes, as many employers would like to see.
“We also urge the Commission to remain skeptical of requests for broad exemptions that could undermine the benefits of strong government,” the Democrats wrote. “This rule is an important step toward ending abusive labor practices, and we support the FTC’s efforts to give workers the voice, dignity, and empowerment they deserve.”
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Warren and other top Democrats, including President Joe Biden, have debated non-compete agreements for years, saying they keep wages in check by limiting worker mobility. The contracts have proliferated across U.S. industries, even in low-wage sectors like fast food, and the FTC estimates that about 30 million workers are subject to them.
Khan, a progressive Biden candidate who is pursuing an agenda to reduce corporate power, said in January that a worker’s ability to leave for a better job is at the “core” of economic freedom. The agency said a widespread ban on the use of non-compete agreements could raise wages by nearly $300 billion a year.
Democratic lawmakers said workers would benefit if employers had to compete more for their jobs.
“Studies have repeatedly shown that noncompetes have increased wages, not just for workers under these agreements, but across the board,” they wrote. “All Americans will benefit from a more dynamic and free labor market accompany the promulgation of this rule”.
The proposed rule would also prohibit employers from using training reimbursement clauses, which do not qualify as traditional non-compete clauses but still prevent workers from accepting other jobs. Such clauses requires workers to pay thousands of dollars in training fees stop before working for a certain period of time.
HuffPost recently reported that a PetSmart dog groomer was turnover $5,000 for training costs when he tried to quit his $15-an-hour job after seven months.
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