FTC’s Noncompete Comment Period Draws Further Criticism

The period of comment for the Federal Trade Commission's (FTC) proposed ban on noncompete agreements in the United States has ended, sparking a backlash from some of the 18,000 commenters.

Proponents of the ban argue that noncompete agreements, contracts between employers and employees that restrict employees' ability to work for competitors or start competitive businesses after leaving their current employer, hinder economic growth and innovation. They allegedly prevent employees from using their skills and knowledge to create new businesses or join competitors. They also argue that noncompete agreements can be used to restrict employees' job opportunities and negotiate lower salaries unfairly.

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On the other hand, opponents of the ban claim that noncompete agreements are vital for protecting businesses' trade secrets and confidential information. They also argue that these agreements are necessary to prevent employees from using their knowledge and skills to benefit competitors at the expense of their former employer.

Furthermore, some business owners argue that the proposed ban is an overreach of government regulation and interferes with their ability to conduct their businesses as they see fit. They say that the decision to use noncompete agreements should be left to individual businesses and their employees.

"The final rule should specifically exempt executive level employees, as well as employees with access to trade secrets and other proprietary or confidential information," Gregory Hoff, The Human Resources (HR) Policy Association's Associate Counsel for Organization, wrote in a statement. Hoff also believes that the FTC is overreaching because they're not a "substantive rulemaking authority" with the right to create and enact legislation.

However, supporters of the ban argue that noncompete agreements can harm workers, particularly those in lower-wage positions. These workers may not have the financial resources to fight noncompete agreements in court and may be unfairly restricted from seeking new job opportunities or starting their own businesses.