Government and Legislative Affairs

Legislative Affairs Updates – What You Should Know

If you have any questions about these articles or need more information, please contact Justin Theriault, SOCT SHRM Director, Government/Legislative Affairs at justin.theriault@jacksonlewis.com or call 860-331-2588.

 FTC Proposes Nationwide Ban on Employment Non-Competes

The Federal Trade Commission (FTC) proposed a new rule that, if made final, would (at least on its face) effectively prohibit non-compete agreements other than in very limited circumstances. The proposed rule, which would supersede all contrary state laws, is remarkable for its sweeping definition of “non-compete clauses” that fall within the ban. The ban would extend to “de facto” non-compete clauses — i.e., contractual provisions that have the effect of prohibiting workers from seeking or accepting employment or operating a business after the conclusion of the worker’s current employment. In this regard, the ban may implicate broadly drafted non-disclosure of confidential information restrictions and repayment of training costs provisions. The ban could also implicate non-solicitation of customer restrictions, depending on the surrounding facts.

Extensive public comment and legal opposition is anticipated as the FTC finalizes and seeks to implement this proposed rule. Employer-side law firm Jackson Lewis P.C. has published an in-depth analysis of the proposed rule, which can be found here: https://www.jacksonlewis.com/publication/deeper-dive-ftc-s-proposed-non-compete-rule