Right to Start Applauds the Federal Trade Commission’s Proposed Action on Noncompete Policy to Expand Entrepreneurial Opportunity
Kansas City, MO – January 6, 2023 – Victor Hwang, Founder and CEO of Right to Start, the national nonprofit organization advancing entrepreneurial opportunity as a civic priority, issued today the following statement on the Federal Trade Commission’s proposed rule, released on January 5, to “Ban Noncompete Clauses, Which Hurt Workers and Harm Competition”:
“The Federal Trade Commission’s proposed rule banning noncompete clauses will have a major impact on new business growth in America. Noncompete clauses have long been a barrier in the way of entrepreneurs, despite the fact that new and young businesses create nearly all new job growth in America. Noncompete clauses or agreements stifle competition, undermine innovation, limit job growth, and restrict wages.
Extensive research has documented the impact of noncompete restrictions: In 2014, the Kauffman Foundation published Rethinking Non-Competes: Unlock Talent to Seed Growth – a landmark report in the longstanding effort to rein in noncompete clauses and unfair bans. Additional research can be found in Right to Start’s Field Guides for Policymakers.
About one out of five Americans is held back by noncompete agreements or restrictions, and Americans overwhelmingly want a level playing field for new businesses and entrepreneurs. A recent bipartisan survey of American voters found that Americans almost unanimously agree that “it is important to America’s future that citizens have a fair opportunity to start and grow their own business”: 94% agree, 2% disagree, and 4% are not sure. Furthermore, 80% of voters, nearly evenly across party lines, support policies that allow people who want to start new businesses more freedom by reducing restrictions that prevent them from competing with their old employers. The FTC’s proposed rule supports unleashing entrepreneurial activity in America. It’s a vital step on the path to expanding economic growth in the United States.”
