The American Bankers Association joined the U.S. Chamber of Commerce and nearly 300 national, state and local trade associations and chambers of commerce in a comment letter expressing opposition to the Federal Trade Commission’s proposal to ban nearly all noncompete agreements in employee contracts. The FTC does not have regulatory authority over banks, but it does have authority over bank affiliates.
The proposal would make it illegal for an employer to enter into a noncompete with a worker or maintain a noncompete with a worker. The proposal also requires employers to rescind existing noncompetes and actively inform workers that they are no longer in effect.
The associations asserted that noncompete agreements encourage investment in employees and help to protect intellectual property. The associations also asserted that the FTC lacks the statutory and constitutional authority to issue the rule.