The National Sporting Goods Association (NSGA) recently asked its members and others in the industry to indicate how the association should respond to the recent proposed ban of non-compete agreements by the Federal Trade Commission (FTC). After receiving feedback, NSGA has commented in favor of a proposed ban of non-compete agreements by the Federal Trade Commission (FTC). Here is NSGA’s comment to FTC on this issue:

The National Sporting Goods Association (NSGA), the trade association representing companies operating over 21,000 sporting goods stores nationwide, helps its retailer and dealer members grow their business and advocates on their behalf.

At the direction of its board of directors, NSGA staff polled its members regarding whether they wanted the organization to comment on the FTC proposal to ban non-compete clauses. Although the membership was divided on its opinion, a majority of respondents expressed support for the proposal. NSGA would like to support the Federal Trade Commission’s proposed ban on non-compete clauses.

Such clauses can be anticompetitive and result in barriers for small sporting goods retailers and dealers, which make it difficult for them to be profitable and continue in business. Loopholes and workarounds have rendered many non-competes ineffective and are likely to result in expensive, prolonged legal matters with individuals bearing the cost of challenging a former employer. Furthermore, non-competes have forced qualified persons out of the sporting goods industry due to their inability to earn a living in the industry covered by a non-compete prohibition.

The protection of confidential company information, intellectual property, and franchise rights are legitimate and significant concerns for employers. Subsequently, stronger enforcement of these measures should be addressed outside of non-compete clauses.

All entries to the FTC will receive a tracking number and are reviewed by a docket manager. Due to the large volume of comments to the FTC on this matter, there is a delay in posting comments on the public pages. Should you choose to make a comment, please be prepared that it may not be posted immediately.