Update On Proposed FTC Rule Banning Non-Competes

On Jan. 5, 2023, the Federal Trade Commission (FTC) proposed a rule banning non-competition covenants between employers and employees. Non-compete covenants are often incorporated into employment agreements and dictate that employees cannot work for a competing employer or launch a business in competition with their prior employer. In addition to other requirements, for a non-compete covenant to be enforceable it must be limited in duration and geographic scope. Non-compete covenants vary in regard to the level in which they restrict post-employment activities, with some attempting to prevent employees from performing work related to their prior job anywhere in the world.

Comments Due to the FTC and Notice Period