Attorney General Becerra Joins Coalition Urging Federal Trade Commission to Ban Non-Compete Agreements

Tuesday, July 16, 2019
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The coalition also proposes more research on the link between labor issues and antitrust laws

SACRAMENTO – California Attorney General Xavier Becerra today joined a coalition of 18 attorneys general, led by the District of Columbia, in submitting a comment letter to the Federal Trade Commission (FTC) calling for greater consideration of labor issues in the enforcement of antitrust laws. In the letter, the coalition urges the FTC to use its authority to stop the use of non-compete, non-solicitation, and no-poach agreements, which, among other things, can prevent workers from seeking better pay and benefits by going to work for a competitor. The coalition describes how these kinds of anticompetitive practices hurt the wages of workers and harm consumers.

“Our economy only works when it provides opportunities for everyone to thrive,” said Attorney General Becerra. “Non-compete clauses hurt workers, and the FTC has an opportunity to use its authority to foster a vibrant marketplace that benefits all Americans. In California, we’re already setting the pace with labor laws that protect against many of these harmful practices and we urge the federal government to follow suit.”

Anticompetitive agreements are not limited to higher-wage, white-collar workers but are also prevalent in the employment of low-wage workers. These agreements are often between an employer and an employee, and limit an employee’s ability to work for a competitor. The coalition asserts that non-compete clauses and other related agreements prevent low-wage employees from seeking better opportunities and inhibit new companies from entering the market. The Attorneys General also note that the focus in antitrust review should not only be on the short-term price effects of a merger or other action, but also on the impacts to the labor market. In the letter, the coalition highlights the need for additional research on the interaction between labor and antitrust law to help strengthen antitrust review and enforcement.

Attorney General Becerra is committed to defending workers in California and across the country and to pursuing vigorous antitrust enforcement. Last month, the Attorney General called on the U.S. Department of Labor to withdraw a rule on joint employment standards that would diminish protections for millions of workers throughout the nation. Earlier this year, the California Department of Justice, as part of a multistate effort, entered into agreements with major fast food companies operating around the country, prohibiting them from including provisions in contracts that make it more difficult for employees to seek better pay and benefits at competing franchises. In May, Attorney General Becerra led a multistate lawsuit against the Trump Administration’s rule undermining collective bargaining rights for Medicaid in-home care workers nationwide. The Attorney General has also actively sought to tackle anticompetitive practices and, among other actions, has led lawsuits against T-Mobile, Sutter Health, and Valero to protect consumers in the marketplace.

In submitting the comment letter, Attorney General Becerra joined the Attorneys General of the District of Columbia, Delaware, Hawai’i, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and Washington. 

A copy of the letter is available here.

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