SUMMER 2023

THE DISTRIBUTOR’S LINK 101
JIM TRUESDELL FTC SPARKS DEBATE WITH PROPOSED REGULATION BANNING NON-COMPETES from page 100
President Biden’s administration has made it a
major strategy to act unilaterally on issues which have
great financial, social and structural impact. Where the
President’s party lacks the votes to get a radical proposal
through both houses of congress, he does not hesitate to
issue executive directives or encourage federal agencies
to issue regulations which can implement policies that
the Congress, as the elected representatives of the
people, will not sanction. He is under a lot of pressure
from progressives in his party to use this moment to
move the goalposts on issues that are critical to them,
regardless of the wishes of the majority of the American
people. This is especially tempting when windows of
political opportunity are open before the next election
cycle might grind the process to a halt.
If the FTC decides to act on this new proposal it
may come down to the courts and whether they will
rule that the non-compete ban goes too far beyond
the natural jurisdiction of the agency. The Supreme
Court is obviously under constant attack as being too
biased toward conservative interests. But is it not a
key function of the court system to put the reins on
overreaching agency actions, and see them for what
they are - a usurpation of the power of the legislative
branch?
Most of us are employees in one form or another. It
may be a natural reaction to side with those advocating
the abolition of non-compete covenants which appear,
on their face, to limit workers’ freedom. If, however,
we intend to encourage entrepreneurship and motivate
companies to come up with new ideas, solutions, and
technology, it would be well to look at things from a
business’ standpoint. If we do not approach reform of
non-competes in a reasoned and incremental manner
we may ultimately be adding one more regulatory nail
to the coffin of our free enterprise economy!
JIM TRUESDELL