The Federal Trade Commission’s Proposed Rule Banning Employment Non-Competes—What It Means and How Businesses Can Prepare Now

On January 5, 2023, the Federal Trade Commission announced a proposed rule banning most non-compete agreements. The proposed rule is far reaching, prohibiting non-compete agreements between employers and workers, including employees, independent contractors and even volunteers. It bans express non-compete clauses as well as agreements deemed de facto non-compete clauses, such as broad nondisclosure, non-solicitation agreements and agreements to repay training costs, where those agreements have the effect of precluding workers from working for other employers in the same field. It also requires businesses to rescind existing non-competes covered by the rule. And it provides for only limited exceptions for certain non-compete agreements between buyers of a business and sellers holding at least a 25% ownership interest.

The public comment period for this rule currently runs through March 20, 2023 and thus the timing and content of any final rule is not yet known.” This proposed rule reflects the federal government’s focus on promoting competition in labor markets, including recent FTC consent decrees with three companies and two individuals in two enforcement actions, alleging non-compete restrictions on a wide range of workers amounted to unfair competition.

Join James Hermon and Elizabeth Voss of Dykema’s Labor and Employment Group and Howard Iwrey and Cody Rockey of Dykema’s Antitrust and Trade Regulation Group for an analysis of the proposed rule and the legal and policy headwinds that lie ahead. They also will explore how businesses can prepare for a final rule banning non-competes, while continuing to protect their trade secrets and other proprietary information as well as their investments in their workforce.

Tuesday, March 21, 2023
1:00 p.m. – 2:00 p.m. ET

Speakers: James Hermon, Howard Iwrey, Cody Rockey, and Elizabeth Voss

CLE accreditation is anticipated for California, Illinois and Texas. We provide Uniform Certificates of Attendance and jurisdiction-specific information for those licensed in other jurisdictions. HRCI eligibility will be determined after the program. If HRCI accredited, we provide Certificates of Attendance to all attendees. Please contact Sarah Minjoe at sminjoe@dykema.com with questions.

Click here for the recording