FMI Urges FTC to Withdraw Proposed Ban on Non-Compete Clauses

Arlington, VA – Today, FMI – The Food Industry Association filed comments with the U.S. Federal Trade Commission (FTC) urging the agency to withdraw or significantly narrow the scope of its proposed rule to ban employee non-compete clauses.

In its comments, FMI emphasized that FTC lacks the statutory authority to issue such a rulemaking and noted that its members are on the cutting edge of developing technology and business strategies that help sustain an efficient food supply chain in the United States, and non-compete agreements are essential in facilitating that work.

FMI Chief Regulatory Officer and General Counsel Stephanie Harris said, “Non-compete clauses are a standard practice in many industries and serve to protect businesses by preventing employees from taking valuable intellectual property, trade secrets, and other sensitive information with them to a competitor.”

Harris continued, “A ban on non-compete clauses would reduce businesses' ability to protect their intellectual property and could lead to reduced innovation, lower quality products and services, and a less conducive environment for recruiting highly skilled workers.”

FMI’s comments noted that if the FTC chooses to issue a regulation prohibiting non-complete clauses, the agency should modify the proposed rule’s definition of “worker” to exclude executive-level employees and other highly skilled workers given their need to collaborate on sensitive business information to be successful in their job functions. Additionally, FMI joined several national, state, and regional trade associations and organizations in filing comments on behalf of the business community.