FTC Ditches Biden’s Silly Noncompete Ban – Workers Win!

Here’s What They Meant to Say

Trump’s FTC Dumps Biden’s Ludicrous Noncompete Ban

In a move that stunned no one, the Federal Trade Commission under President Trump has finally put the nail in the coffin of Biden’s ridiculous ban on noncompete agreements. These agreements, which prevent workers from jumping ship to competitors or starting their own businesses, were the subject of a now-defunct rule championed by former FTC chair Lina Khan. The rule was never implemented thanks to a lawsuit from Ryan LLC, a Dallas-based tax firm, which led a federal judge in Texas to halt it nationwide. The Biden administration’s pathetic appeal to the 5th Circuit Court of Appeals was paused and ultimately dismissed by the Trump administration’s FTC, led by new Chair Andrew Ferguson. It’s clear that Biden’s overreach has been rightfully squashed.

Ferguson and his fellow Republican commissioner Melissa Holyoak didn’t mince words, calling the rule’s illegality ‘patently obvious.’ They pointed out that it trampled over the laws of all 50 states and displaced existing regulations across 46 states. It’s laughable that the Democrats thought they could impose such a sweeping ban without any regard for state sovereignty. Meanwhile, the lone Democrat on the commission, Rebecca Kelly Slaughter, tried to cling to her seat after Trump attempted to fire her earlier this year. Her dissent against the dismissal of the appeal is just sour grapes from a party that can’t handle losing.

The Hypocrisy of the Left’s Noncompete Crusade

The left loves to cry about noncompetes, claiming they hurt workers. Yet, they conveniently ignore the fact that these agreements are used by businesses of all sizes to protect their interests. The FTC estimated that 30 million Americans are bound by noncompetes, from minimum wage workers to CEOs. But Lina Khan’s rule would have invalidated nearly all of them, except in the rarest of circumstances. She claimed it would boost wages by nearly $300 billion per year and create 8,500 new businesses annually. What a load of nonsense! The real impact would have been to cripple businesses and hand over their trade secrets to competitors.

The business community was quick to push back, with Ryan LLC and the U.S. Chamber of Commerce arguing that the ban would cause irreparable harm. They were right to challenge this unlawful overreach by the FTC. Even Ferguson, despite his criticism of noncompetes, recognized the agency’s lack of authority to impose a nationwide ban. It’s telling that the left’s solution to every problem is more government control, even when it means stomping on the rights of businesses. They claim to be for the little guy, but their policies always favor big government over individual freedom.

Ferguson’s Plan: Targeted Enforcement, Not Blanket Bans

Instead of a blanket ban, Ferguson has a better idea: using FTC enforcers to go after noncompetes and no-poach agreements that violate the Sherman Act. This approach targets the real abuses without trampling on the rights of businesses. The FTC recently ordered the country’s largest pet cremation business to stop enforcing noncompetes against its nearly 1,800 employees, showing that targeted enforcement can be effective. Slaughter, however, whines that this isn’t enough and that a nationwide rule is needed. She’s just upset that her party’s power grab was stopped in its tracks.

The FTC is also inviting the public to share information about noncompetes, hoping to better understand their scope and effects. This is a smart move to gather data before taking action. Slaughter claims that during the rulemaking process, the FTC received 26,000 public comments, almost all in support of a ban. But let’s be real, those comments were probably from the same left-wing activists who think government should control every aspect of our lives. It’s time to focus on real solutions, not the left’s misguided crusade against noncompetes.

Real-Life Impact: Workers Like Rebecca Denton Deserve Better

Take the case of Rebecca Denton, a transaction coordinator in Grand Junction, Colorado. She signed a noncompete in 2019 and found herself overworked during the housing boom. She wanted to quit but knew she couldn’t do similar work in a three-state area for a year due to her noncompete. She felt trapped, but she had the financial resources to take lower-paying gig work instead. Many of her friends in real estate weren’t so lucky. In 2022, Colorado passed a law limiting noncompetes, which Denton praised for giving workers more freedom.

Denton’s story shows the real impact of noncompetes on workers. But the left’s solution is always more government control, not empowering workers to negotiate better terms. If companies treat their employees well and pay them fairly, they won’t need noncompetes to keep them from leaving. It’s about time the left stopped using workers as pawns in their power plays and started focusing on real solutions that benefit everyone, not just their political agenda.