The US FTC proposes a new rule to ban nearly all employee noncompete agreements

On 5 January 2023, the Federal Trade Commission (FTC) released a Notice of Proposed Rulemaking (NPRM) for the Non-Compete Clause Rule. The proposed rule, if adopted, would effectively ban the use of non-competes with employees by making the use of such non-competes a violation of Section 5 of the Federal Trade Commission Act (FTC Act). The proposed rule would also invalidate existing employee non-competes and require employers to inform employees that those non-competes are void. The Commission voted 3-1 to publish the NPRM, with Republican Commissioner Christine Wilson issuing a sharp dissent. The proposed rule comes just months after the Commission issued a Policy Statement that included an aggressive and expansive interpretation of its Section 5 authority, and in the midst of a

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Authors

  • Hogan Lovells (Washington)
  • Hogan Lovells (Washington)
  • Hogan Lovells (Washington)
  • Hogan Lovells (Washington)
  • Hogan Lovells (Washington)
  • Hogan Lovells (Washington)
  • Hogan Lovells (Northern Virginia)
  • Hogan Lovells (Denver)
  • Hogan Lovells (Washington)

Quotation

Katie Hellings, Logan M. Breed, Benjamin F. Holt, Lauren E. Battaglia, Chuck Loughlin, Dan Shulak, George Ingham, Katy Forsstrom, John Hamilton, The US FTC proposes a new rule to ban nearly all employee noncompete agreements, 4 January 2023, e-Competitions January 2023 - II, Art. N° 110560

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