Today, TechFreedom wrote a coalition letter requesting that commenters be given 30 days after all initial comments have been made publicly available to file reply comments in the FTC’s non-compete rulemaking proceeding. The letter asks the FTC to do what the Obama Administration urged agencies to do: give “interested parties the opportunity to react to (and benefit from) the comments… of others during the rulemaking process itself.” 

“The potential for the FTC to act without minority commissioners makes reply comments indispensable,” said Berin Szóka, President of TechFreedom. “Congress intended the FTC not to be composed entirely of members of the President’s party. Yet this will soon happen for the first time in the FTC’s 109-year history. Chair Khan may not intend to vote on a rule against non-compete agreements without any minority commissioner, but she also may not wait indefinitely for one to be confirmed. So an agency designed to be bipartisan may well take a monopartisan vote on the most significant rulemaking in its history—with no realistic possibility of dissent. Allowing reply comments will at least ensure that the record includes rebuttals of arguments made in comments.”

“In general, reply comments are essential to democratizing the FTC,” Szóka continued. “Reply comments are necessary regardless of whether a minority commissioner participates. Chair Khan has stated a desire to further democratize the agency—but democratizing the FTC surely cannot mean expanding its powers without an open exchange of ideas. She’s talked about listening to the Administrative Conference of the United States on rulemakings. Well, the ACUS recommended reply comments back in 1976 and again in 2011.”

“Reply comments are especially valuable in so important and complex a rulemaking,” Szóka continued. “At its heart, the proposed ban on non-competes means regulating labor markets, something traditionally left to the NLRB, or in the case of non-competes, to well-developed state law. The issue is not only complex; it lies far beyond the expertise of the FTC. This rulemaking raises many complex legal questions; on each, the FTC will set a precedent for any future UMC rulemakings it undertakes—with consequences across the economy. But even on its own terms, this rule would easily be the most economically significant the FTC has ever made.”

“Skipping reply comments increases the FTC’s risk of losing in court,” Szóka concluded. “In 2021, the Supreme Court unanimously rejected the FTC’s authority to obtain monetary redress under its longstanding interpretation of Section 13(b) of the FTC Act. The decision, based on the text and structure of the Act, illustrates just how easily the courts could reject the FTC’s claims that Section 6(g) authorizes competition rulemakings. Any non-compete rule may well wind up at the Supreme Court. Knowing that it will face closer judicial scrutiny than ever before, the Commission would be wise to create a robust record, and that is only possible if stakeholders have the opportunity to respond to initial comments.”

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TechFreedom is a nonprofit, nonpartisan technology policy think tank. We work to chart a path forward for policymakers towards a bright future where technology enhances freedom, and freedom enhances technology. 

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