FOR IMMEDIATE RELEASE
For media inquiries, please contact: Reggie Rucker, ILSR Communications Director
WASHINGTON, D.C. (April 23, 2024) – Stacy Mitchell, co-executive director at the Institute for Local Self-Reliance (ILSR), made the following statement in response to the Federal Trade Commission’s (FTC) proposed final rule preventing most employers from enforcing noncompete agreements against workers — a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.
“We applaud the FTC’s final proposed rule outlawing noncompete agreements. Noncompete agreements have emerged as a tool for large corporations to exploit their power over both workers and markets. While noncompetes harm workers by limiting job mobility and depressing wages, they also give large firms yet another way to hobble smaller competitors and take market share. They act as a kind of barrier to entry for would-be entrepreneurs by preventing workers from starting their own businesses, and they can prevent startups and small businesses from hiring the experienced workers needed to expand and grow.
While more states are taking action to limit the use of noncompete agreements, it is imperative that the FTC use its authority to ban noncompetes nationally, restoring worker rights, spurring new business creation, and fighting corporate concentration.
In 2019, ILSR joined allies to file a petition calling on the FTC to use its rulemaking authority to put an end to noncompetes. The petition made the case that noncompetes harm competition and urged the agency to take action. We are pleased to see that the FTC, under Chair Lina Khan’s leadership, took advocates’ call to action seriously.”
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