NYC Comptroller Lander Files Brief in Support of FTC’s Ban on Non-Compete Agreements Amid Legal Challenges

 

New York City Comptroller Brad Lander, in partnership with The Interfaith Center on Corporate Responsibility and Zevin Asset Management, submitted an amici curiae brief in support of the Federal Trade Commission (FTC) and its defense of its recently issued non-compete rule, which banned the use of non-compete agreements for nearly all workers.

“Non-compete agreements lock workers into low-paying jobs, limit career advancement, and disproportionately affect women and workers of color,” said New York City Comptroller Brad Lander. “The businesses fighting against this rule are clearly trying to cling to outdated practices that harm workers and the economy for the sake of their profits. The FTC’s ban must be implemented on a national level in order to protect all workers equally and create a fairer, more competitive economy.”

The FTC’s rule has faced legal challenges from businesses, including a real estate company in Florida. A judge in the Middle District of Florida temporarily blocked the rule, claiming it may exceed the FTC’s authority to create such regulations. Despite recognizing that the FTC has the power to address unfair competition, the judge ruled that banning non-competes across the board raised broader legal questions.

Back in April 2023, Comptroller Lander penned a joint comment letter with Council Members Keith Powers and Tiffany Cabán to the FTC, urging strong action to curb these restrictive agreements that limit job mobility and suppress wages across the workforce. The letter emphasized how non-compete agreements disproportionately harm marginalized workers and called on the FTC to strengthen the proposed rule by including functional equivalents of non-compete agreements, such as non-solicitation and non-poaching clauses, which also restrict workers’ ability to switch jobs and seek better opportunities.

In response, Comptroller Lander joined other amici to support the FTC rule, arguing that a national, uniform rule is essential and that leaving the issue to be handled on a case-by-case basis would fail to address the widespread harm caused by non-compete agreements.

“We strongly support the FTC’s ban on non-compete agreements, which particularly impact low-wage workers by limiting job mobility and suppressing wages. As long-term investors, we believe that companies that invest in their workforce for long-term retention and growth, without using the artificial barrier of noncompete agreements, will be better positioned to respond to labor shortages and economic downturns,” said Josh Zinner, Chief Executive Officer at The Interfaith Center on Corporate Responsibility.

“We believe a resilient labor market is integral to corporate long-term value. Restricting mobility and wages with noncompetes limits the talent pool for companies to recruit from, hindering corporate and economic growth,” said Marcela Pinilla of Zevin Asset Management. “Additionally, eliminating noncompetes protects the individual worker’s freedom to pursue their employment of choice.”