"A market without competition is without growth, innovation, or economic moderators. A non-compete clause is a tool that, when enforced, can create stagnation. Not a great way to grow a vibrant economy," Colorado small business owner Tracy duCharme recently testified at a listening session with Federal Trade Commission (FTC) Chair Lina Khan hosted by Small Business Majority. Tracy once used non-competes but later realized that these agreements prevented natural competition, which is valuable to innovation and small business growth.
As a former small business owner, I know firsthand that these agreements are unnecessary to protect proprietary assets. Before starting Small Business Majority, I founded and ran my business for 12 years in California. California is one of three states–the other two being Oklahoma and North Dakota–that prohibit the enforcement of non-compete agreements. It was exciting to be part of the new and growing interactive communications field and be free to hire whomever I wanted. I still have close ties to many small businesses in California, and their entrepreneurial spirit has never suffered from California's ban on non-competes. This is one reason why I believe President Joe Biden was right to encourage the FTC to ban non-compete agreements during his second State of the Union address–and why the FTC should enact its proposed rule to ban non-competes.
