Noncompete Contracts: Protecting Businesses or Restricting Workers' Options?

Following the Federal Trade Commissions’ decision to ban noncompete contracts, voices across the spectrum are reflecting on what the decision means for workers, businesses, and regulatory practices.

Win for Workers: A writer in Bloomberg (Lean Left bias) praised the FTC’s decision as a victory for workers’ rights, arguing that “The problem for businesses is not that they will lose trade secrets or valuable investments in workers to competitors. It’s that they just lost bargaining power to workers — and that’s exactly what the FTC intended.” The writer concluded, “If it should be easy for employers to fire workers, then it should also be easy for employees to quit. And that requires workers to have the right to take a better job. By allowing workers to move freely to roles where they are most valued, the FTC is fostering a competitive and fair labor market.”

Washington Overreach: The Wall Street Journal Editorial Board (Lean Right bias) argued the FTC is overreaching and had “effectively invalidated tens of millions of employment contracts without authority from Congress.” While noncompete contracts “may frustrate some workers,” the board argued these contracts “protect an employer’s intellectual property and investment in worker development,” and employers are “usually are willing to negotiate less restrictive covenants to protect their trade secrets and training investments.” The board concluded that the regulation on these contracts should be done at the state level, stating, “State and local lawmakers can better balance such tradeoffs for their constituents than can bureaucrats in Washington.”