Small businesses support banning non-compete agreements

As small business owners and representatives of the small business community, we urge the Federal Trade Commission to enact its proposed rule to ban non-compete agreements. Non-compete agreements are a significant impediment to entrepreneurship, create a non-level playing field and impede the ability of employees to maximize their skills. They are not only a barrier to entry for entrepreneurs, but they also prevent small firms from hiring the most diverse, qualified and skilled talent.  

In our economy, competition spurs innovation and leads to lower prices for goods and services. Non-compete agreements stifle free, fair and open competition—the hallmark of a market-based economy that is grounded on a level playing field. It is reasonable for a business to protect its proprietary assets and trade secrets; however, non-disclosure or confidentiality agreements are more than sufficient to accomplish this goal.  

We’re not alone in opposing non-compete agreements. Small Business Majority’s polling found a majority of entrepreneurs say that non-compete agreements are a significant issue for small business, and 1 in 5 reported their own business had been negatively affected by non-compete agreements. In another survey, 87% said that leveling the playing field for small businesses via anti-trust enforcement and restricting non-compete agreements was a priority for policymakers.  

What’s more, states like California, Oklahoma and North Dakota already prohibit the enforcement of non-compete agreements with no loss of business success and entrepreneurial spirit in any of these states. 

For these reasons and more, we urge you to enact this rule to support aspiring entrepreneurs and help small businesses access qualified workers.