The National Employment Law Project (NELP) announced its opposition to a Texas federal judge's decision to block the Federal Trade Commission’s (FTC) rule that would ban noncompete clauses. The rule restricts workers from joining competitor companies during or after employment.
According to NELP, noncompete clauses reduce job mobility and limit workers' ability to negotiate better working conditions by moving to higher-paying or more favorable positions. Originally intended for highly paid executives, these provisions are now widespread across various occupations, including low-wage jobs like sandwich makers, dog walkers, and hotel workers. Over 30 million workers in the U.S., or about 18 percent of the workforce, are required to sign noncompetes as a condition of accepting a job, according to a press release by NELP.
Research suggests that banning noncompetes could help reduce the earnings gap, with potential decreases of 4.6 percent for white men and 9.1 percent for non-Black, non-white women. Even independent contractors, who typically have the freedom to work for multiple clients, are often subject to noncompetes that restrict where they can work, according to NELP.
"The FTC’s attempt to ban noncompete clauses was a significant step towards building worker power and ensuring working people have the freedom to seek better opportunities. While the judge’s decision to block this rule is disappointing, it only strengthens our commitment to fighting for fair treatment and better conditions for all workers. Noncompete provisions have long suppressed wages and stifled job mobility, but we believe that every worker deserves the chance to improve their circumstances and our laws should reflect that," said Rebecca Dixon, NELP’s president and CEO.
NELP is an advocacy group dedicated to creating a fair and inclusive economy where workers enjoy extensive rights and flourish in quality employment. Established in 1969, NELP pursues its mission through legal and policy initiatives, research, capacity-building, and communication efforts in collaboration with various local, state, and national partners.