U.S. Sen. Todd Young (R-IN) on Friday said he supports a newly proposed rule from the Federal Trade Commission (FTC) that would ban employers from imposing non-compete agreements on their workers, a widespread practice that the agency said suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.
“Non-compete agreements restrict our workforce and stifle economic growth,” Sen. Young said in a Jan. 6 statement. “This is why I have long fought to rein in their use, and I am pleased that the FTC is taking steps to address their overuse.”
About one in five American workers — approximately 30 million people — are bound by a non-compete clause, which is a contractual term between an employer and a worker that blocks the worker from working for a competing employer, or starting a competing business, typically within a certain geographic area and period of time after the worker’s employment ends, according to the FTC’s Jan. 5 proposed rule.
The agency is seeking public comment on the proposed rule, which is based on a preliminary finding that non-competes constitute an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act. By stopping this practice, the FTC estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for millions of Americans.
“In the final rule, I am hopeful that the FTC can strike the right balance to support workers while ensuring that our American employers can continue to thrive,” said Sen. Young.
During the previous Congress, Sen. Young on Feb. 25, 2021 introduced the bipartisan, bicameral Workforce Mobility Act of 2021, S. 483, with bill sponsor U.S. Sen. Chris Murphy (D-CT) to limit the use of non-compete agreements. U.S. Reps. Scott Peters (D-CA), Mike Gallagher (R-WI) and Peter Meijer (R-MI) proposed the same-named H.R. 1367 at the same time in their chamber.
“The FTC’s proposed rule banning the use of non-competes is great news for workers and for maintaining our economy’s competitive edge,” said Sen. Murphy on Friday.
In recent years, Sen. Murphy said there’s been “an explosion” of non-compete agreements across industries and income brackets that have depressed wages and stifled innovation.
“Senator Young and I applaud the FTC for taking this step, and I look forward to continuing our work in Congress to support American workers and entrepreneurs,” he added.