The Federal Trade Commission went too far when it banned noncompete agreements in employment contracts, wrote The Washington Post Editorial Board on Wednesday, saying that the ban “sweeps too broadly” and that the agency might not have the legal authority to make this rule.
The rule, which will be published in the Federal Register on Tuesday and take effect 120 days later, invalidates noncompete clauses for all workers making less than $151,164 a year and bans all future clauses regardless of salary. WaPo’s Editorial Board wrote that it supports a ban for employees who earn less than $100,000 a year—80% of the workforce, they said—but allows companies to have a tighter leash on senior personnel that are more likely to know trade secrets or gotten expensive training.
The Editorial Board noted that business groups have already filed lawsuits on the grounds that the FTC might not have legal authority to implement the ban, writing that the commission made the move using “aggressive interpretations of both the agency’s jurisdiction over ‘unfair methods of competition’ and its power to combat such practices through regulatory action.”
Instead, the board said that the best way to guarantee that a noncompete ban is solid, both legally and politically, is for Congress to enact such legislation. Despite multiple bipartisan bills that tackle the issues, however, none have yet to advance.
