The FTC announced yesterday that it was extending the deadline to submit public comments on its proposed rule banning employment non-competes.
With the extension, the FTC will now be accepting comments on the proposed rule until April 19. Originally, the deadline for submitting comments was March 20.
Information on how to submit comments can be found in the Federal Register notice.
On February 16, 2023, the FTC hosted a public forum for the purpose of examining the proposed rule banning non-compete agreements. The agenda included, among other things, opening remarks from Chair Kahn, an overview of the rulemaking process by the FTC’s general counsel, a panel discussion, and comments from the public. A recording of the forum is available here.
In her preliminary remarks, Chair Kahn claimed that the proposed rule would increase workers’ earnings significantly and non-competes are an unfair method of competition. She claimed that the FTC has deep expertise on non-competes based upon enforcement, analysis, and addressing public comments. During the explanatory session, FTC staff explained that the comment period ends March 20th and encouraged the submission of additional comments. Staff also explained the functional test in the proposed rule and indicated that the ban applies to any agreement that functionally operates as a non-compete, which could be an overly broad non-disclosure agreement or training repayment agreement. FTC staff stated that the proposed rule does not apply to “run of the mill non-disclosures.”
As earlier reported on this blog, Commissioner Christine Wilson, the sole dissenter in the Federal Trade Commission’s proposed rule banning non-competes, announced yesterday that she is resigning from the agency over her fierce opposition to progressive FTC Chair Lina Khan’s methods of advancing her agenda. In a Wall Street Journal OpEd, Commissioner Wilson took aim at Ms. Khan’s “disregard for the rule of law and due process.” She cited several examples of this alleged disregard for the rule of law and due process, including the FTC’s launch of the rulemaking process to ban nearly all non-compete clauses in employee contracts, affecting roughly one-fifth of employment contracts in the US. As Commissioner Wilson noted in her vigorous dissenting statement to the FTC’s Notice of Proposed Rulemaking (“NPR”), the proposed rule defies the Supreme Court’s decision in West Virginia v. EPA (2022), which held that an agency can’t claim “to discover in a long-extant statute an unheralded power representing a transformative expansion in its regulatory authority.” As Commission Wilson noted in her dissent, and as we have pointed out here and here, the FTC’s NPR purports to undo hundreds of years of state legal precedent—dating from even before the American Revolution—that employs a fact-specific inquiry into whether a non-compete clause is unreasonable in duration and scope, given the business justification for the restriction.
In the first installment of our 2023 Trade Secrets & Non-Competes Webinar Series, Seyfarth partners Kate Perrelli, Michael Wexler, Robert Milligan, Dan Hart, and Dawn Mertineit discussed the new Federal Trade Commission’s (“FTC”) proposed rule banning the use of non-competes with employees and workers. The expert panel addressed what the proposed rule would do and what employers need to know
Continue Reading Webinar Recap! FTC Proposes Rule Banning Use of Non-Competes. Now What?
As our colleagues have previously reported in this blog, on January 5, 2023, the Federal Trade Commission issued a notice of proposed rulemaking (NPRM) concerning its unprecedented effort to ban all non-compete clauses with workers and to preempt state law on the issue. The NPRM followed just one day after the FTC announced that it had reached a consent settlement with three companies for alleged unfair trade practices by imposing overly burdensome non-compete agreements.
Not surprisingly, the NPRM has sparked a surge of commentary in the legal and business communities and immediately courted controversy. The sole Republican member of the FTC, Commissioner Christine S. Wilson, issued a vigorous dissent, arguing:
Thursday, January 12, 2023
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In the first installment of the 2023 Trade Secrets & Non-Competes Webinar Series, our team will focus on the new Federal Trade Commission’s (“FTC”) proposed rule banning the use of
Continue Reading Upcoming Webinar! FTC Proposes Rule Banning Use of Non-Competes. Now What?
In the final 2022 webinar, Seyfarth attorneys Kate Perrelli, Dan Hart, and Dallin Wilson discussed new and pending legislation and enforcement issues for non-competes.
As a conclusion to this webinar, we compiled a summary of takeaways:
Wednesday, December 21, 2022
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In the final installment of our 2022 Trade Secrets Webinar Series, our team will focus on new legislation and the enforcement of non-competes. Any company that seeks to use non-compete
Continue Reading Upcoming Webinar! Overview of Non-Compete Legislation and Enforcement Issues from 2022
In the second program in the 2022 Trade Secrets Webinar Series, Seyfarth partners Jesse Coleman, Dan Hart, and Caitlin Lane discussed how to identify the greatest threats to trade secrets, provided tips and best practices for protecting trade secrets abroad, and covered enforcement mechanisms and remedies internationally and in the US.
As a follow up to this webinar, our
Continue Reading Webinar Recap! Protecting Trade Secrets and Enforcing Restrictive Covenants Internationally
Thursday, March 17, 2022
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Trade secrets are critical intellectual property, and the threat to trade secrets continues to increase year after year. It’s vital for companies to protect trade secrets, both in the US
Continue Reading Upcoming Webinar! Protecting Trade Secrets and Enforcing Restrictive Covenants Internationally