Press Release: HRPA Responds to Proposed Federal Trade Commission Rule to Ban Non-Competes

Opposes Blanket Restriction on Non-Competes, 
Especially for Senior Executives

WASHINGTON, D.C. – HR Policy Association, representing chief human resource officers of more than 400 of the largest employers in the United States, today releases the following statement by Ani Huang, HR Policy Association senior vice president, after the Federal Trade Commission issued a proposal to ban the use of non-compete clauses for all employees and independent contractors:

HR Policy Association and its members believe that non-compete clauses, when used responsibly, can help companies protect vital investments in their employees, while ensuring the security of research and development, trade secrets, and institutional knowledge.

While we are still digesting the details of the rule, we are concerned by the extremely broad scope of the proposal, especially with regard to the blanket ban on the use of non-competes in employment agreements. We greatly appreciate the FTC’s recognition of our concerns through its request for comments on whether senior executives should be exempted and whether low- and high-wage workers should be treated differently under the rule.  

While companies differ in their use of non-competes based on their individual workforce needs and composition, non-compete agreements for certain employees, such as senior officers, are often a necessary tool for the protection of commercial information. A blanket, one size-fits-all regulation prohibiting non-compete agreements across the board without providing any flexibility for employers will have a detrimental effect on the ability of companies to implement leadership structures, invest in new technologies and product lines, and retain key employees.

We look forward to working with the FTC to improve the proposal and address employer concerns within the rule.

HR Policy Association is the lead organization representing chief human resource officers of major employers. The Association consists of more than 400 of the largest corporations doing business in the United States and globally, and these employers are represented in the organization by their most senior human resource executive. Collectively, their companies employ more than 11 million employees in the United States, over nine percent of the private sector workforce, and 20 million employees worldwide.  They have a combined market capitalization of more than $8 trillion. These senior corporate officers participate in the Association because of their commitment to improving the direction of human resource policy. Their objective is to use the combined power of the membership to act as a positive influence to better public policy, the HR marketplace, and the human resource profession.  For more information visit www.hrpolicy.org.