Michael Hiltzik: The FTC is pushing new rights for workers. Big business is pitching a fit, of course

Michael Hiltzik, Los Angeles Times on

Published in Business News

Whenever a government agency proposes a regulation that might help workers by reining in an employer abuse, you can count on some heavy breathing from the big business lobby.

Case in point: The Federal Trade Commission's move to ban noncompete clauses in employment contracts, which forbid ex-workers to take jobs in their chosen field, sometimes for years after they quit and often within hundreds of miles of their former employer. About one in five American workers — 30 million people — are bound by these restrictions.

The FTC's target is a good one. "By preventing workers across the labor force from pursuing better opportunities that offer higher pay or better working conditions, and by preventing employers from hiring qualified workers bound by these contracts, noncompetes hurt workers and harm competition," the commission wrote in issuing its rule proposal on Jan. 5.

The U.S. Chamber of Commerce provided the heavy breathing on Jan. 22, through an op-ed in the Wall Street Journal over the byline of the chamber's president and chief executive, Suzanne P. Clark.

For Clark, the proposal was a sign that FTC Chair Lina Khan "doesn't intend to let the law or Constitution get in her way" as she tries to level the playing field between employers and employees.

The chamber, she writes, will fight the noncompete clause rule "with all the tools at our disposal, including litigation."


A couple of things about this. Clark puts her thumb on the scale by referring to the FTC's target as noncompete "agreements."

In most cases, they're not agreements, in the sense of having resulted from negotiations between employer and employee. Rather, they're restrictions imposed on workers by businesses, often hidden away in the fine print of employment contracts.

Workers often don't even know they're in place until after they've left one company for another, and their original employer threatens a lawsuit.

Also, it's obvious that the chamber isn't merely concerned about the noncompete clause regulation but about the Khan-led FTC's intention to take a tougher stand against unfair methods of competition.


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