PIA Expresses Continued Support for Noncompetes Following FTC Rule Banning Them

May 1, 2024
WASHINGTON  -- The U.S. Federal Trade Commission (FTC) announced a final rule imposing a near-universal ban on noncompete agreements, effective later this year. In comments to the FTC last year, PIA sought to alert the agency to the damage such a ban would have on businesses, particularly independent insurance agencies.

“In our comments, we asked the FTC to withdraw its proposed ban in favor of a more tailored rule that would address any corporate overuse of such documents, but without impeding the work independent agents do every day. To our dismay, it declined to do so,” said Lauren G. Pachman, Esq., PIA’s Counsel and Director of Regulatory Affairs. 

The ban will become effective 120 days after its publication in the Federal Register, which is expected to occur on or about May 7. Additionally, the final rule has already prompted a lawsuit from the U.S. Chamber of Commerce and is expected to generate considerable litigation. Those lawsuits are likely to prompt a temporary stay, or postponement of its effective date, until the legal process ends. “A delay will give businesses more time to prepare for the change, and, of course, if a court decides that the rule is invalid, the FTC is likely to withdraw it altogether,” Pachman added.

“PIA members use noncompetes to protect their businesses, and we intend to continue to work with the FTC and the administration to alleviate its concerns while protecting the rights of businesses and workers to use noncompetes,” said Pachman. 

Read PIA’s Analysis of the FTC Noncompete Rule 

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance but specialize in coverage of automobiles, homes, and businesses. PIA’s web address is www.pianational.org