September 29, 2021
On behalf of the U.S. Chamber of Commerce (“the Chamber”), we are pleased to submit these comments to the Federal Trade Commission (“FTC”) in response to its Solicitation for Public Comments on Contract Terms that May Harm Competition. These comments will focus on non-compete clauses, in reference to a Petition for Rulemaking to Prohibit Worker Non-Compete Clauses. That petition asks the FTC to interpret the FTC Act’s prohibition on unfair methods of competition (UMC) to “write a rule holding that the use or enforcement of non-compete clauses is a per se violation of Section 5 of the FTC Act.”
As explained more fully in the comments, the FTC should combat potentially anticompetitive non-compete clauses through its traditional tools, such as competition advocacy and case-by-case litigation, rather than through a rule for two principal reasons: First, the FTC lacks legal authority to promulgate a rule that would ban non-compete clauses. Second, and in any event, such a rule would harm consumers by banning the many pro-competitive aspects of non-competes.
The petition advocates for a “solution” in search of a problem. Should the FTC attempt to respond to the petition and initiate a rule making, it will face strong legal challenges that waste precious enforcement resources.