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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