NAB On Record As Opposing Non-Compete Ban

The NAB has signed its name to a letter sent to members of Congress this week that opposes a proposal by the Federal Trade Commission (FTC) to prohibit non-compete clauses in contracts, according to The Desk.

The proposal made by the FTC in January would bar employers in the United States from imposing non-compete clauses when hiring or promoting workers. Such clauses are routinely found in contracts for television and radio talent, online journalists, editors, producers, photographers, voice-over artists, actors and other media and entertainment workers.

Non-compete clauses typically prohibit an employee from accepting a job offer at a company that offers goods or services in the same industry for a pre-determined period of time. That time frame generally lasts from six months to a year, though some non-compete clauses can extend beyond that.

In the letter sent to Congress and the FTC this week, NAB officials and others said the FTC “lacks the constitutional or statutory authority to issue such a rule and, in attempting to do so, the agency is improperly usurping the role of Congress.”

The FTC hasn’t weighed in on the accusation that it lacks the authority to ban non-compete clauses, but the agency is standing by its proposal.

“The freedom to change jobs is core to economic liberty and to a competitive, thriving economy,” Lina M. Khan, the chairwoman of the FTC, said in a statement. “Non-competes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand. By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”

Some workers don’t know their rights under various state laws, and elect for unemployment for a period of time in order to see through the non-compete period. Additionally, state bans on non-compete clauses aren’t always honored by federal courts, though it depends on where the company is based or where the employee lives.

The NAB and other organizations say the FTC is out of line with its proposal, and has urged Congress to revisit tools to curb its attempts with “appropriations riders.” A spokesperson for the NAB said its organization is specifically opposed to the proposal because the broadcast industry “presents a unique case for reasonable non-compete clauses due to the substantial investments broadcasters make in promoting on-air talent.”

In addition to the NAB, the letter sent to Congress and the FTC was signed by dozens of national and state organizations, as well as local chambers of commerce. Those national organizations include the Consumer Technology Association, the National Newspaper Association and the Consumer Brands Association.