FTC Vote Will Vote On Noncompete Ban This Week

The U.S. Federal Trade Commission (FTC) will vote today (April 23) on its final version of a rule that would prohibit noncompete agreements between employers and their employees. As Connecting the Dots has reported over the past year, the Metals Service Center Institute has opposed this rule and has joined other trade associations to stop the FTC from moving forward.

Assuming the FTC votes in the affirmative, staff members from the FTC will give a presentation on the rule, followed by a second vote to issue the rule in its final form.

The agency did not indicate if any changes have been made to the previous version of the rule.

According to the National Association of Manufacturers (NAM) and other trade associations, a noncompete ban would cause disruption to the majority of manufacturing operations in the United States since about 70 percent of manufacturers in the country use noncompete agreements, and do so to safeguard intellectual property, sales information, industrial processes and business strategies.

In fact, a NAM survey found approximately 66 percent of survey respondents, representing manufacturers of all sizes, said a ban would interfere with their operations. This new prohibition would harm workers as well. About half of manufacturers surveyed by NAM said a ban would have a negative effect on their investment in employee training programs, for example.