The Trump FTC was Right to Reverse the Non-Compete Ban
Brian Albrecht, ICLE Chief Economist, was recently quoted in a RealClear Markets article discussing why the Trump FTC was right to reverse the Biden administration’s unlawful and economically unsound noncompete ban. Read the full article here.
The rule’s supposed benefits rest on shaky foundations. Economist Brian Albrecht explained in a recent post that the limited academic research on noncompetes focuses on individual states, industries, and types of jobs. The results found in this research may not generalize to the entire economy under a universal ban and such a ban might harm some workers.
The proposed ban would thus override hundreds of state laws, creating what Albrecht described as a “one-size-fits-all approach,” making it impossible to learn more about when noncompetes can and cannot benefit workers and employers alike by encouraging them to invest more fully in one another. This kind of investment fosters economic growth by encouraging worker skill acquisition and technological innovation. Likewise, employer investment in worker training leads to higher worker salaries in the long run as the more productive workers can command a higher salary from their current and future employers. Thus, in these situations, a noncompete can be a win-win for the worker and employer.