Policy Briefing — FTC proposes nationwide ban on employee noncompete clauses
The Federal Trade Commission issued a notice of proposed rulemaking on 5 January 2023 to prohibit employers from imposing noncompete clauses and to require rescission of existing agreements, citing unfair competition concerns.
The FTC published a proposed rule on 5 January 2023 that would ban most employee noncompete agreements and obligate employers to rescind existing clauses and notify affected workers. The agency argues noncompetes suppress wages and innovation, invoking Section 5 authority over unfair methods of competition.
People operations and legal teams should inventory restrictive covenants, model compensation and trade secret protections without noncompetes, and prepare comment strategies ahead of the FTC’s rulemaking timeline.
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