FTC Announces Special Open Commission Meeting on Rule to Ban Noncompetes
Voting Scheduled for Tuesday, April 26, 2023
Final Rule Expected to Eliminate Unfair and Harmful Restrictions
WASHINGTON, D.C. – The Federal Trade Commission (FTC) will hold a special open meeting on Tuesday, April 26, 2023, to vote on a proposed final rule that would ban non-compete agreements. The meeting will begin at 1:00 p.m. EDT and will be livestreamed on the FTC's website.
The FTC's proposed rule would prohibit employers from entering into or enforcing non-compete agreements with their employees. Non-compete agreements typically restrict employees from working for a competing business or starting their own business after leaving their current job. The FTC believes that these agreements are unfair to workers and harm competition.
"Non-compete agreements are a relic of the past that have no place in a modern, dynamic economy," said FTC Chair Lina M. Khan. "They suppress wages, stifle innovation, and prevent workers from fully participating in the labor market. Our proposed rule would put an end to these harmful practices and promote greater economic freedom and mobility."
The proposed rule would apply to all non-compete agreements, regardless of industry or occupation. However, there are some limited exceptions for certain types of agreements, such as those that protect trade secrets or customer relationships.
The FTC's proposed rule is the result of a year-long investigation into the use of non-compete agreements. The Commission found that these agreements are widespread and often enforced against low-wage workers and other vulnerable employees.
The FTC's proposed rule is expected to face legal challenges from business groups and other opponents. However, the FTC is confident that the rule is on solid legal ground and will ultimately benefit workers and consumers.
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