Becca Kelly Slaughter, a commissioner at the Federal Trade Commission, got her job back last Wednesday. She immediately requested a vote to restore the FTC’s “click to cancel” rule, which would make it easier to end recurring subscriptions. On Friday, she issued a dissent in the FTC’s decision to stop defending its ban on employee noncompete agreements in federal court. In just a few days, she had fulfilled the mission of the agency of protecting workers and consumers.
So by Monday, she was out of a job again.
U.S. Chief Justice John Roberts, in a perverse ruling at odds with a 90-year-old direct precedent, issued a stay of a D.C. district court’s order reversing the illegal firing of Slaughter by President Trump earlier this year. This effectively allows Trump to fire Slaughter for now, pending ongoing review of the case.
Trump, and therefore Roberts, doesn’t want a dissenting voice at the FTC pointing out all the ways that he is governing by and for the wealthy and immiserating ordinary people in the process. So Slaughter had to go, and quickly. Trump’s lapdog in black robes eagerly complied with the request.
The biggest example of this is the FTC’s surrender on the noncompete ban, one of the signature achievements of the agency under Lina Khan. Noncompete clauses stuck into employment contracts prohibit workers from leaving to join another company in the same field for a prescribed period. While originally used for top executives with proprietary information about businesses, they have more recently been imposed on pet groomers, fast-food workers, janitors, and more. About 1 in 5 workers have a noncompete agreement in their employment contract.
The goal is obvious: to suppress wages by preventing the free movement of labor that might create competition for their services. One could even say this is against capitalism as traditionally understood; economists in the mold of Adam Smith typically argue the market for labor is supposed to be open and competitive, to incentivize the most productive use of it. The FTC estimated that workers would gain $400 billion over a decade from this rule, in the form of higher wages.
You know that Trump’s functionaries were embarrassed by having to give up on the noncompete ban, because they tried to hide it. Last Thursday, the FTC issued a one-off enforcement action against a pet cremation business called Gateway, which imposed one-year noncompetes on nearly all of its workers, presumably to protect the important trade secrets of how to cremate a pet. There were no penalties imposed on Gateway; the order simply prevented the noncompetes from being enforced. One FTC commissioner admitted that this enforcement was left over from the Khan days.
Conservatives don’t want the FTC to be able to use rulemaking under Section 5 authority to prevent unfair methods of competition.
An injunction is fine as far as it goes, but as Slaughter pointed out in a dissenting statement, Gateway is a private equity–fueled rollup of the cremation industry, and the FTC did nothing to deal with their monopoly. It does little to free workers from a noncompete in their industry if there are no other competitors for their labor. In addition, Slaughter wrote, “one-off enforcement is no substitute for the FTC’s meaningful, marketwide noncompete rule that will protect workers across the country.” Workers would have to wait until the FTC got around to enforcing the law to wiggle out of a noncompete.
Also on Thursday, the FTC issued a request for information to “better understand the scope, prevalence, and effects of employer noncompete agreements.” This is after a fact-finding process on the noncompete ban that was several years long, and the receipt of 26,000 public comments during the regulatory process, nearly all of them in favor of the ban. Why was another public comment period necessary?
It’s now clear that this was all done to create a false impression. “Companies can use noncompetes to shield themselves from competition for workers and prevent new entrants into their industry,” chair Andrew Ferguson said in a post that’s still on X. “Workers are the soul of America, and the Trump-Vance FTC won’t stop fighting for them.”
Literally the next day, Ferguson stopped fighting for them. He dismissed the appeals to a case before the Fifth Circuit where a district court found that the FTC had exceeded its authority in issuing the rule. A federal court in Pennsylvania came to the opposite conclusion, backing the FTC’s use of its unfair methods of competition authority to write the rule. By dropping its defense, Ferguson’s FTC is siding with one court ruling blocking the noncompete ban over another that allowed it to proceed.
Ferguson’s statement claimed that the rule was “patently” illegal, while still trying to claim that noncompetes “can be pernicious,” hyping his one-off enforcement action that doesn’t even solve the problem of limiting economic liberties for workers. Slaughter told it like it is in her dissent. “Despite claiming to support American workers, President Trump has, at every turn, thrown workers under the bus to ingratiate himself with corporations and their billionaire CEOs.”
Slaughter added that if the FTC wants to change or even strike down the noncompete rule, it can go through the usual agency notice and comment procedure. “The law does not permit the agency to void this popular rule under cover of darkness by simply withdrawing from litigations,” she notes. It’s a cowardly way to throw in with bosses over workers, but also one with a clear intention.
Conservatives don’t want the FTC to be able to use rulemaking under Section 5 authority to prevent unfair methods of competition. The noncompete ban was the first high-profile action to revive this authority, and by failing to defend it, other courts can look to this dubious precedent that the authority is limited. So Ferguson and Trump aren’t just stabbing workers in the back; they are hobbling the FTC’s ability to crack down on a host of abuses of market power by corporations.
This action on noncompetes was telegraphed for months. In July, I wrote about how cities and states would have to take the lead on restoring worker freedom. The FTC’s action should give a boost to reformers across the country, with the knowledge that they can provide practically the only remaining relief from these agreements.
If Trump wants to find out why noncompetes are bad for both workers and business, he could have asked his new pals at the Big Tech dinner last week. Noncompete agreements have been unenforceable in California for decades. This has made Silicon Valley thrive, and enabled engineers with new ideas to go out on their own and prosper. They helped create the vibrant industry that has now abandoned competition and innovation in favor of market power and heavy-handed restraints.
But in Trump’s America, big business holds the reins, and anyone with a contrary view must be expunged from his government. That’s why Becca Kelly Slaughter isn’t in her office today.