The FTC Proposes Ban On Non-Competes

On January 5, 2023, the Federal Trade Commission (FTC) proposed a sweeping new rule which, if enacted in its draft form, would ban virtually all non-competition agreements (non-competes), including those already in effect. The FTC's action comes in response to President Biden's July 2021 Executive Order, which directed the Commission to issue rules limiting non-competes "and other clauses or agreements that may unfairly limit worker mobility."¹While the DOJ and FTC have recently pursued litigation and other enforcement actions tackling non-competes and other restrictive covenants,² the FTC had not issued any rules or regulations pursuant to the Order. That changed this week, when the FTC announced a new subchapter entitled "Rules Concerning Unfair Methods of Competition," and presented five proposed provisions under a new Part 910, "Non-Compete Clauses."³⁴