Murphy, Young, Senate Colleagues Urge FTC and DOJ to Limit Non-Compete Agreements

Press Release

U.S. Senators Chris Murphy (D-Conn.) and Todd Young (D-Ind.) led five senators in support of the Federal Trade Commission (FTC) and Department of Justice (DOJ) Antitrust Division's role in restricting the use of non-compete clauses in employment contracts to promote worker mobility at a time of low unemployment rates and economic recovery. Last week the FTC and DOJ Antitrust Division held a workshop studying "the implications for efforts to protect and empower workers through competition enforcement and rulemaking" after President Biden directed the FTC via Executive Order to address non-compete clauses. In their comment letter to the FTC Commissioners and Assistant Attorney General Jonathan Kanter, the senators highlighted the anti-competitive nature of non-competes, which stifle innovation, depress wages, and hinder entrepreneurship. U.S. Senators Richard Blumenthal (D-Conn.), Chris Van Hollen (D-Md.), Sherrod Brown (D-Ohio), Ben Cardin (D-Md.), Tina Smith (D-Minn.) also signed the letter.

"The American workforce has experienced significantly reduced job mobility, tepid wage growth, and declining rates of entrepreneurship in recent decades. At the same time, non-compete clauses have become more prevalent," the senators wrote. "At their core, non-competes inherently manipulate competitive labor market forces by narrowing the available employment options for workers. This manipulation is bad for both employees and employers. For employers, non-competes limit the available supply of qualified workers to fill their workforce needs. This is especially true at a time of low unemployment and recovery.

The senators continued: "In short, non-compete clauses stifle entrepreneurship by preventing employee spinoffs and take away workers' leverage to grow their careers and enjoy economic mobility by switching firms or bargaining for higher wages. We therefore believe that the FTC and DOJ Antitrust should act to limit the use of non-compete clauses. Reducing the use of non-competes would allow workers to get better jobs, boost wages, increase entrepreneurship, spur innovation, and allow for a more robust recovery out of the COVID-19 pandemic."

"Limiting the use of non-compete clauses is a bipartisan issue in the United States Senate, with Senators strongly discouraging the abusive and anti-competitive use of non-compete agreements through public statements, in Committee hearings, and through legislation, including the Workforce Mobility Act. The FTC and DOJ Antitrust Division have a duty and the authority to significantly restrain the use of non-compete clauses. We believe that the use of non-compete clauses in the American economy is anti-competitive," the senators concluded.

Earlier this year, Murphy and Young introduced the Workforce Mobility Act, bipartisan legislation to limit the use of non-compete agreements that negatively impact American workers. In July, Murphy and Young also applauded President Biden's Executive Action to encourage the FTC to limit non-compete agreements.

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