Employment Agreements: FTC Rule Would Bar Noncompete Provisions

According to the FTC, the proposed rule would apply to independent contractors and anyone who works for an employer, whether paid or unpaid. The new rule would also require employers to rescind existing noncompete provisions and actively inform workers that such clauses are no longer in effect.

At this time, the proposed rule is just that – proposed. After the rule is published in the Federal Register, the public will have 60 days to comment. Given the sweeping nature of the proposed new rule (and the large impact it would have on numerous industries), it is unknown when or if it will become final or in what form.

We will monitor this development and provide updates as the process continues.



See also:

• Non-Compete Clause Rulemaking (fact sheet and proposed text)

• FTC Proposes Rule to Ban Noncompete Clauses, Which Hurt Workers and Harm Competition (press release)