FTC Proposes Sweeping Ban Of Employee Non-Competes

On January 5, 2023, the Federal Trade Commission (FTC) issued a proposed rule broadly seeking to ban non-compete agreements with nearly all U.S. workers, with only limited exceptions. The proposed rule would:

• make it illegal under federal antitrust laws for U.S. employers to enter into, attempt to enter into, or maintain non-competes with any workers, including employees, independent contractors, interns, or volunteers, or represent that such workers are subject to covered non-compete clauses;
• ban agreements (other than certain agreements entered into in the sale-of-a-business context) between an employer and worker that restrict the worker from seeking or accepting employment or operating a business post-employment, including other restrictive covenants, such as nondisclosure agreements, that could be considered de facto non-competes; and