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FTC Proposes Banning Non Compete Agreements Nationwide


Oh boy.  Buckle up, readers.  Last week, the Federal Trade Commission (“FTC”) proposed a new rule that would ban non compete agreements for employees and independent contractors across the country.

As if that is not already a sweeping proposal, the FTC went one step further and proposed rescinding any non compete agreement currently in place.  That would require employers to inform current (and former) employees and any independent contractors that the non compete agreement that was currently in place was no longer in effect.

Advocates of this blanket ban on non compete agreements argue it is needed on the grounds that non compete agreements suppress wages, prohibit employment, and stymie innovation.

Now before readers start cheering (or sweating) this proposed rule, I want to caution you that it is not in place.  The next likely step will be for the FTC to open up a public comment period in which comments will be taken on the proposed rule.  Once the comment period closes, the wording of the proposed rule might be reworked.  Looking even further down the road, the FTC might then publish the proposed rule in the Federal Register after which the ban on non competes could become effective.  However, somewhere in between then and now, I would expect there to be several legal challenges to the proposed rule.

While this still has a ways to go before becoming a reality, a nationwide ban on non compete agreements is a potentially massive development.


For additional information:  https://www.cnbc.com/2023/01/11/what-the-proposed-ban-on-noncompete-clauses-means-for-you.html

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