FTC Proposes Rule To Ban Noncompete Clauses

On January 5, 2023, the Federal Trade Commission (FTC) released a Notice of Proposed Rulemaking (NPRM) (available here) that would ban employers from imposing noncompetes on their workers. The proposed rule would prohibit employers from entering into noncompete clauses with their workers, including independent contractors, and would require employers to rescind existing noncompete clauses with workers and actively inform them that the clauses are no longer in effect. An employer that entered into a noncompete clause prior to the compliance date must rescind the noncompete clause no later than the compliance date and must provide notice to a worker within 45 days of rescinding the noncompete clause.