As our firm first reported on January 9, 2023, the Federal Trade Commission is currently accepting comments for its proposed ban of employment noncompete agreements. In light of more than 8,800 comments received to date, and reported requests to extend the comment period, the FTC has now extended the comment period to April 19, 2023.
The FTC’s proposed rulemaking would prohibit noncompete agreements in any sector and at any wage level, and would void existing noncompete agreements. Unsurprisingly, the rulemaking has drawn significant interest and vastly opposing opinions on its propriety. The FTC has defended its proposed ban as curbing “a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses.” However, the same rulemaking has also been described by outgoing FTC Commissioner Christine S. Wilson as “a departure from hundreds of years of precedent,” and by the United States Chamber of Commerce as a “blatantly unlawful” proposal that exceeds the FTC’s statutory authority.
Interested parties can submit their own opinions on the Non-Compete Clause Rule in comments to the FTC. Our Government Regulation and Employment Law teams (represented by the authors) can also help clients prepare a comment for submission, or prepare for a new legal landscape if the rule is ultimately adopted.