NEWS19 April 2023

Insights Association suggests changes to FTC non-compete ban

Legal News North America Public Sector

US – The Insights Association (IA) has criticised Federal Trade Commission (FTC) proposals to ban non-compete clauses, but supported the clauses being prohibited for lower-level staff.


The FTC has proposed removing most non-compete restrictions on workers, but in comments filed by the IA earlier this week, the association warned the policy could be “legally questionable”.

The IA said that non-compete clauses should only be outlawed for lower-level staff, which it said would apply to employees earning salaries below a set income threshold.

Involuntary, ‘not for cause’ termination from a job should also result in either compensation for the length of the non-compete clause or the clause’s immediate removal, the IA said.

Other IA proposals include that non-compete agreements should not apply to unpaid involuntary termination without cause, provided that confidentiality and client non-solicitation obligations are met, and that reasonable non-solicitation agreements and non-disclosure agreements must be respected.

Non-compete clauses entered into between the seller and buyer of a business or part of a company should not be restricted, the IA added.

Melanie Courtright, chief executive at the IA, said: “As a profession, we have prided ourselves in self-governing our practices, including those related to employment. And yet, the traditional business practice of non-compete agreements has not sufficiently evolved to the satisfaction of government or society.

“The time has come for us to reconsider these practices and err on the side of attracting and enabling people to work and stay in market research.

“While we continue to advocate for the importance of non-disclosure and non-solicit agreements, we can either change our non-compete position, or have it changed for us at the federal level. Our reputation and our future viability stands to suffer if, as an industry, we unduly prevent people from pursuing their livelihood and providing for their family.”