The FTC proposed a new rule last Thursday that would ban employers from imposing non-compete clauses on their workers. The proposed rule extends recent enforcement actions against three companies that resulted in a ban on those companies’ use of non-compete restrictions and the imposition of various remedial actions, and purports to supersede inconsistent state law.
The proposed rule would deem non-competes an unfair method of competition, compel employers to rescind existing non-competes with their workers within 180 days of publication of the final rule, and compel employers to inform affected workers of the rescission. An exception is made for non-competes in connection with the sale of a business sale imposed on the seller of the business.
The proposed rule is now open for public comment here.
