In response to the Federal Trade Commission’s (FTC) proposed rule to ban all non-compete clauses, the Student Borrower Protection Center submitted a comment applauding certain aspects of the proposal. The comment also outlines additional changes that are within the FTC’s authority to deliver on President Biden’s Executive Order on Promoting Competition in the American Economy protecting workers from employers using unfair methods of competition, and unfair and abusive practices to lock them in undesirable jobs.
The comment urges the FTC to incorporate a blanket ban on Training Repayment Agreement Provisions (TRAPs); “stay-or-pay” contracts that demand departing workers pay the salaries and training costs of their replacements if they do not provide lengthy notice of resignation periods; and other forms of employer-driven debt, such as so-called “liquidated damages” provisions. The comment also outlines how the FTC’s proposed “reasonableness” test for de facto non-competes, like TRAPs, creates a massive, vague loophole that practically guarantees that these contract terms will remain and become an even more attractive means for employers to hold back workers. Our comment urges the FTC to close this loophole entirely.
We were joined by many partner organizations in calling for the FTC to categorically ban the use of TRAPs and close the loophole created by the proposed “reasonableness” test on de facto non-competes.
Read the SBPC comment here.
Read the UC-Irvine Student Loan Law Initiative comment here.
Read an Open Markets Institute-led coalition comment here.
Read REAL Women In Trucking’s comment here.
Read Economic Security Project’s comment here.
Read Toward Justice’s comment here.