The Michigan Chamber of Commerce has made official its opposition to a Federal Trade Commission proposal to ban non-compete agreements.
Employers use those agreements to restrict workers from leaving and taking jobs at rival companies or starting their own competing businesses.
In an explanation of its proposal, the FTC says the practice is "often exploitative ... suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses."
The Michigan Chamber, in its letter opposing the proposal, says non-compete agreements "can lead businesses to invest more in their employees and allow them to better protect their intellectual property."
Wendy Block is the senior vice president of business advocacy and member engagement for the Michigan Chamber of Commerce.
She said when used correctly, non-compete agreements benefit workers and businesses. Block says they’re mainly used to secure confidential information within workplaces.
"Employers who are responsibly using non-competes are really using them to protect proprietary information."
Block is also concerned about the legal precedent of the FTC’s proposal.
“We are concerned that the FTC has overstepped their legislative authority, the authority that Congress has given them, by trying to regulate and ban non-competes arbitrarily.”
Historically, rules about non-compete agreements have been determined by the states.
Block said this has allowed non-compete agreements to be limited in Michigan. In the Michigan House and Senate, a bill banning non-compete agreements for minors and low-wage workers was introduced earlier this year.