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Event Description

On January 9, 2020, the Federal Trade Commission held a public workshop to examine whether there is a sufficient legal basis and empirical economic support to promulgate a Commission Rule that would restrict the use of non-compete clauses in employer-employee employment contracts. This follows a labor market workshop hosted by the Department of Justice Antitrust Division in September 2019. 

Non-compete clauses are covenants in employment contracts that limit the ability of an employee to join or start a competing firm after a job separation. At the workshop, legal scholars, economists, and policy experts will review the current state of the law and economic literature on non-compete clauses in contracts between employers and employees. Academic panels will evaluate the effects of non-compete clauses on labor market participants, and their efficiency rationales (if any). The panels also will consider the potential harms to workers that can and should be addressed through the FTC’s rulemaking, law enforcement, or advocacy authority.

To aid our analysis of these issues, FTC staff is seeking public comment from interested parties on the following questions:

  • What impact do non-compete clauses have on labor market participants?
  • What are the business justifications for non-compete clauses?
  • Is state law insufficient for addressing harms associated with non-compete clauses?
  • Do employers enforce non-compete agreements contained in standard employment contracts? How routine is such enforcement?
  • Are there situations in which non-compete clauses constitute an unfair method of competition (UMC) or an unfair or deceptive act or practice (UDAP)? How prevalent are these situations?
  • Should the FTC consider using its rulemaking authority to address the potential harms of non-compete clauses, applying either UMC or UDAP principles? What “gap” in existing state or federal law or regulation might such a rule fill? What should be the scope and terms of such a rule? What is the statutory authority for the Commission to promulgate such a rule?
  • Should the FTC consider using other tools besides rulemaking to address the potential harms of non-compete clauses, such as law enforcement, advocacy, or consumer/industry guidance?
  • What additional economic research should be undertaken to evaluate the net effect of non-compete agreements? Should additional economic research on the empirical effects of non-compete agreements focus on a subset of the employee population? If so, which subset?

FTC staff welcomes comment on these and related questions and issues. The process for submitting comments is explained below.

Attending the Workshop

The workshop was free and open to the public.

Live Webcast Details

This event was webcast live.

Questions?

If you have a question about the workshop or public comment process, please email NonCompetes@ftc.gov.

  • 8:30-8:35 am

    Welcome and Introductory Remarks

    Bilal Sayyed
    Director, Federal Trade Commission, Office of Policy Planning

    8:35-9:05 am

    Statutory and Judicial Treatment of Non-Compete Clauses

    Orly Lobel
    Warren Distinguished Professor of Law and Director of Employment and Labor Law Program, University of San Diego School of Law

    9:05-9:20 am

    Applying State and Federal UDAP Principles to Non-Compete Clauses

    William E. Kovacic
    Professor and Director of Competition Law Center, George Washington University Law School

    9:20-9:35 am

    Break

    9:35-11:05 am

    Panel 1: FTC Authority to Address Non-Compete Clauses

    Panelists:
    Jane Flanagan
    Visiting Scholar, IIT Chicago-Kent College of Law
    William E. Kovacic
    Professor and Director of Competition Law Center, George Washington University Law School
    Orly Lobel
    Warren Distinguished Professor of Law and Director of Employment and Labor Law Program, University of San Diego School of Law
    Eric A. Posner
    Kirkland & Ellis Distinguished Service Professor of Law, University of Chicago Law School
    Damon A. Silvers
    Director of Policy and Special Counsel, AFL-CIO
    Randy M. Stutz
    Vice President of Legal Advocacy, American Antitrust Institute

    Moderators:
    Sarah Mackey, Acting Deputy Director, Federal Trade Commission, Office of Policy Planning
    Jacob Hamburger, Attorney, Federal Trade Commission, Office of Policy Planning

    11:05-11:20 am

    Break

    11:20-11:30 am

    Remarks

    Rebecca Kelly Slaughter
    Commissioner, Federal Trade Commission

    11:30-12:00 pm

    Effects of Non-Compete Clauses: Economic Literature Review

    Ryan Nunn
    Fellow in Economics Studies and Policy Director for the Hamilton Project, Brookings Institution

    12:00-1:00 pm

    Lunch Break (on your own)

    1:00-2:30 pm

    Panel 2: Effects of Non-Compete Clauses: Analysis of the Current Economic Literature and Topics for Future Research

    Panelists:
    Kurt J. Lavetti
    Associate Professor of Economics, Ohio State University
    Ryan Nunn
    Fellow in Economics Studies and Policy Director for the Hamilton Project, Brookings Institution
    Evan Starr
    Assistant Professor of Management & Organization, Robert H. Smith School of Business, University of Maryland
    Ryan Williams
    Finance Professor, University of Arizona

    Moderators:
    John McAdams, Economist, Federal Trade Commission, Bureau of Economics

    2:30-2:45 pm

    Break

    2:45-2:55 pm

    Remarks

    Noah Joshua Phillips
    Commissioner, Federal Trade Commission

    2:55-3:25 pm

    Federal Rulemaking Process: Key Principles and Considerations

    Aaron L. Nielson
    Professor, Brigham Young University Law School

    3:25-5:25 pm

    Panel 3: Should the FTC Initiate a Rulemaking Regarding Non-Compete Clauses?

    Panelists:
    Sally Katzen
    Professor of Practice and Distinguished Scholar in Residence, New York University School of Law
    Kristen C. Limarzi
    Partner, Gibson, Dunn & Crutcher
    Aaron L. Nielson
    Professor, Brigham Young University Law School
    Richard J. Pierce, Jr.
    Lyle T. Alverson Professor of Law, George Washington University Law School
    Howard Shelanski
    Professor, Georgetown University Law Center

    Moderators:
    Derek Moore, Attorney Advisor, Federal Trade Commission, Office of Policy Planning
    Kenny Wright, Legal Counsel, Federal Trade Commission, Office of General Counsel

    5:25-5:30 pm

    Closing Remarks

    Sarah Mackey
    Acting Deputy Director, Federal Trade Commission, Office of Policy Planning

  • Transcript - Files

  • Request for Comments

    The deadline for submitting public comments is March 11, 2020. Interested parties are invited to submit written comments on the topics described above to the FTC electronically or in paper form. FTC staff will consider these comments when developing the workshop agenda, and may use these comments in subsequent reports, statements, or policy papers, if any. If an entity has provided funding for research, analysis, or commentary that is included in a submitted public comment, please identify such funding and its source on the first page of the comment.

    Submit a Comment

    If you prefer to submit comments in paper form, please refer to “Non-Competes Workshop, Project No. P201200” both in the text and on the envelope, and mail or deliver to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex X), 600 Pennsylvania Avenue, NW, Washington, DC 20580. Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form or by courier or overnight service, if possible.

    Read Submitted Comments

FTC Privacy Policy

Under the Freedom of Information Act (“FOIA”) or other laws, we may be required to disclose to outside organizations the information you provide when you pre-register. The Commission will consider all timely and responsive public comments, whether filed in paper or electronic form, and as a matter of discretion, we make every effort to remove home contact information for individuals from the public comments before posting them on the FTC website.

The FTC Act and other laws we administer permit the collection of your pre-registration contact information and the comments you file to consider and use in this proceeding as appropriate. For additional information, including routine uses permitted by the Privacy Act, see the Commission’s comprehensive Privacy Policy.

This event is open to the public and may be photographed, videotaped, webcast, or otherwise recorded. By participating in this event, you are agreeing that your image — and anything you say or submit — may be posted indefinitely at ftc.gov or on one of the Commission's publicly available social media sites.