The US FTC proposes to ban employer non-compete agreements which signals a possible sea-change for employers across industries

The Federal Trade Commission’s (FTC’s) January 5, 2023 Notice of Proposed Rulemaking (NPRM) for the Non-Compete Clause Rule, which would ban nearly all post-employment non-competes, signals a possible sea-change for employers across industries. Significantly, however, non-profit entities—including non-profit health systems and universities—are generally exempt from coverage under the Federal Trade Commission Act, and thus if the proposed rule is finalized, it will not apply to most non-profits. Even so, as a result of the FTC’s focus on the issue, non-profits may find their non-competes and other restrictive covenants subject to greater scrutiny under state and local laws that increasingly prohibit or restrict such agreements, as well as under existing antitrust law. As we previously