Herring encourages FTC to curb abusive non-compete clauses

Attorney General Mark Herring joined a coalition of 19 state Attorneys General to encourage the Federal Trade Commission to undergo a rulemaking with regard to abusive non-compete clauses in employment contracts.

In the letter to the FTC, Attorney General Herring and his colleagues highlight the damage these clauses do to workers, other businesses, and consumers.

“Non-compete clauses can be detrimental to employees who wish to move from one job to another or even start their own business,” said Herring. “There are many other ways in which businesses and employers can protect their interests without limiting the options of their employees. The FTC should strongly consider making a rule that would limit the use of non-compete clauses and make sure that employees across the country are afforded the same opportunities to advance their careers.”

Non-compete clauses in employment contracts prevent workers in many industries from moving from one business to another or from starting their own business. One in every five workers — 30 million Americans — are currently restricted by non-compete clauses. Non-compete clauses prevent workers from getting better jobs, pursuing higher ambitions, and leaving hostile or unsafe work environments.

Employers use these clauses despite the fact that they can protect their interests in ways that are less harmful to their employees and to other businesses, including by using intellectual property law, nondisclosure agreements, or simply by making their workplace an environment where workers want to stay.

Herring and his colleagues are asking the FTC to use its rulemaking authority to limit the use of non-compete clauses because the FTC is in the best position to curb the practice nationwide and to make sure that every worker and business throughout the country are protected from the abusive use of non-compete clauses.

A rule preventing the use of such clauses will curb a pervasive, noncompetitive practice and encourage all employers to retain workers by becoming a better place to work — not by threatening the worker or a new employer with a lawsuit.

Joining Herring in sending the letter are the attorneys general of California, Delaware, the District of Columbia, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and Wisconsin.