The National Association of Wholesaler-Distributors (NAW) has filed an amicus brief in support of a lawsuit challenging the Federal Trade Commission’s ban on non-compete clauses. NAW was joined by 10 other trade associations in filing the brief in support of the plaintiffs in Ryan, LLC vs FTC.
The brief argues the FTC’s ban relies on cherry-picked data to argue that non-competes are harmful to workers, consumers, and innovation. The brief makes the case that the FTC does not have the authority to ban non-competes and that the commission violates the Administrative Procedures Act.
There is ample evidence showing that non-competes are beneficial, not harmful. Wholesaler-distributors utilize non-competes for well-compensated employees in targeted, limited, and responsible ways. Banning them would threaten the ability of employers to invest in their employees and protect sensitive business information and relationships.
According to Alex Hendrie, Associate Vice President of Government Relations at NAW, “The FTC’s proposal ignores the fact that there are clear benefits to limited, targeted non-compete clauses for both employers and employees. Non-competes ensure that wholesaler-distributors can protect proprietary information and important business relationships while investing in their workforce, providing upward mobility for employees, and ensuring high wages and generous benefits. NAW’s brief argues the FTC’s rule is based on cherry-picked data and that it fails to serve the interests of businesses, workers, and consumers.”
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