Rep. Jayapal: Banning Non-Compete Clauses Will Create a More Equitable Society
By Rep. Pramila Jayapal (WA-07)
Workers are having a moment. Between Me Too, the pandemic, new investments in American industry, and a resurgent, powerful labor movement, more people are demanding their rights as workers than ever before. Progressives in Congress helped lead the successful push to pass the Protecting the Right to Organize (PRO) Act and the Raise the Wage Act in the last Congress, and we must continue to push the Republican majority to do the same in this Congress. At the same time, we have released a set of Executive Actions that the Biden Administration can take to raise wages, lower costs and protect the rights of workers on the job. Rebalancing our economy to put power back in the hands of workers, rather than corporations and bosses, takes a government approach. One powerful agency that can help do this is the Federal Trade Commission (FTC) that has, under Chairwoman Lena Khan, clearly articulated the fights before us and the solutions we must embrace.
Recently, the FTC proposed a new rule that would ban employers from imposing harmful non-compete clauses and support a worker’s basic right to seek new employment. For years, employers have weaponized non-compete clauses to exert control over their employees, preventing them from seeking better working conditions and higher-paying jobs in their field. Non-compete clauses affect roughly 20 percent of the American workforce and prevent employees from working for their employer’s competitors, often extending for months or years after their employment ends. It’s not only corporate executives affected — workers in lower-wage industries like hair stylists, security guards, and cafeteria workers are held captive by these agreements. Non-competes suppress wages and keep them low, since workers cannot quickly secure better pay and working conditions elsewhere. They also harm our economy and innovation, increasing market concentration and slowing the growth of new businesses. They’re anti-worker, anti-competitive, and should be a relic of the past.
A majority of Americans agree. A new poll by Data for Progress finds 60 percent of voters support the FTC’s proposal to ban non-compete agreements, including majorities of Democrats (67 percent), Independents (57 percent), and Republicans (55 percent).
To quote President Biden, “capitalism without competition isn’t capitalism — it’s exploitation.” I wholeheartedly agree, and it’s why as a member of the 117th Congress’s House Select Committee on Economic Disparity and Fairness in Growth, I worked alongside my colleagues to help create a roadmap to build a fair economy by promoting workers’ rights and supporting small businesses. Our final report found that non-compete agreements are especially harmful to fast-food, retail, and low-wage workers. That’s why we crafted policy recommendations including limits on non-compete agreements to prioritize fairness in our economy.
Americans know that fair and equitable competition doesn’t hinder innovation, but rather, helps it thrive. The FTC will soon finalize this proposal into an official rule, and the benefits are clear. It would expand career opportunities for millions of Americans and increase wages by nearly $300 billion per year, in both low-wage and high-wage industries, and support the creation of new start-ups and small businesses.
Banning non-compete agreements will encourage a more equitable economy for all – and progressives in Congress will continue to push for a competitive economy where workers have full access to high-quality, good-paying jobs.
Representative Pramila Jayapal (@RepJayapal) is the Chair of the Congressional Progressive Caucus and a leading member of the House Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law (ACAL). During the 117th congress, she served as a member of the Select Committee on Economic Fairness in Growth.