FTC Extends Comment Period on Proposed Rule Banning Noncompetes
FTC extended the comment period on a proposed rule banning employers from subjecting their employees to noncompete clauses. The extension is from March 20 until April 19, 2023.
As previously covered, the "Non-Compete Clause Rule" would prohibit employers from (i) entering into, or attempting to enter into a noncompete clause with an employee, and (ii) telling employees that they are subject to a noncompete clause. The proposal would also require employers to terminate any active noncompete clauses and inform those employees that any such contract provision is no longer valid.
For more information and analysis, click here for Fried Frank's Antitrust and Competition Law Alert® on the FTC proposal.
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House Republicans criticized the FTC rulemaking proposal to ban noncompete clauses, asserting that the proposal "exceeds its delegated authority and imposes a top-down, one-size-fits-all approach that violates basic American principles of federalism and free markets."
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FTC proposed the "Non-Compete Clause Rule," which would prohibit employers from (i) entering into, or attempting to enter into a non-compete clause and (ii) representing to employees that they are subject to a non-compete clause.
