A Potential Ban on Non-Competes: Here’s the Scoop

The Federal Trade Commission’s (the “FTC”) goal is to protect the American public from unfair business practices and from unfair methods of competition in business and trade. Competition in business can include competition for good workers, especially when the job market is tight and unemployment is low. (Source: Business Insider) Businesses try to limit competition for workers by retaining the employees they have. One tool that employers use to retain employees is the non-compete agreement. These agreements make it more difficult for workers to find a new job within their industry, sector, or geographic area, at least for a period of time. As many as one in five working Americans is subject to a noncompete agreement. (Source: Nasdaq) That might soon change, if the FTC has its way. On January 5, 2023, the FTC voted in favor of a proposed rule that would essentially prohibit noncompete agreements. The FTC’s proposed rule would make clear that noncompete agreements are an unfair method of competition. The proposed rule would likely also invalidate existing noncompete agreements that businesses try to impose or enforce. (Source: FTC Notice of Proposed Rulemaking) This proposed rule is anything but certain, however: by law, the public has until March 10, 2023 to submit comments on it, and many influential groups (including the U.S. Chamber of Commerce) have chimed in against the proposed ban on noncompete agreements. In response to comments received during the public comment period, the FTC could decide to trash or limit the proposed rule on noncompete agreements. In other words, noncompete agreements could be part of doing business in America for the foreseeable future. So, don’t tear up your noncompete agreement or apply to work with one of your company’s competitors – at least, not yet. You might have questions about developments in noncompete law. The skilled employment attorneys at Hawks Quindel are ready to discuss any questions or concerns you may have about your noncompete agreement, or any other contract between you and your employer. Hawks Quindel exclusively represents employees and labor, not management, so they know how to protect your best interests. Contact Hawks Quindel today.