PTG Responds to FTC Request for Information Regarding Employer Noncompete Agreements

In a letter to the Federal Trade Commission (FTC), PTG confirms that many PTG members, like similarly situated financial industry companies, have entered into noncompete agreements with current and former employees – agreements under which the employees agree that they will not work for defined competitors for a limited time after they leave their employers. These firms rely heavily on noncompete agreements to protect their investment in their employees and to safeguard the confidential information that gives them a competitive edge.

PTG emphasizes that its support for noncompete agreements is focused on highly skilled and highly compensated employees who play a direct role in developing, deploying, utilizing, and/or monitoring proprietary intellectual property and trading technology or who otherwise have access to sensitive confidential information. PTG does not support, and has never advocated for, the use of noncompete agreements for low-wage workers. The noncompetes at issue in our industry are limited in scope, duration, and application, designed specifically to protect sensitive and high-value intellectual capital—not to restrict general labor mobility.

Limiting the use of noncompete agreements would hamper PTG members’ ability to protect their intellectual property from disclosure to competitors and jeopardizes their ability to provide liquidity to U.S. financial markets. Further, noncompete agreements incentivize firms to invest in specialized training and development for employees, knowing they will not immediately take those skills to a competitor.

PTG urges the Commission to distinguish these professional, well-compensated, and mutually beneficial noncompete arrangements from the types of low-wage or coercive noncompetes that have drawn legitimate public concern. A one-size-fits-all prohibition would unintentionally harm innovation-driven industries that depend on limited, narrowly drawn protections to safeguard the intellectual assets that make the U.S. markets competitive globally.