Federal Trade Commission

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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.Continue Reading FTC Extends Public Comment Deadline on Proposed Rule Banning Employment Non-Competes Until April 19th

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On Wednesday, March 8 at 12 p.m. Pacific, Robert Milligan—Seyfarth partner and co-chair of the firm’s Trade Secrets, Computer Fraud & Non-Competes practice—is presenting the “What Does the FTC’s Crackdown on Non-Competes Mean for Trade Secrets?” webinar for the California Lawyers Association.

The panel will discuss:

  • The FTC’s discussion
    • … Continue Reading Robert Milligan to Present Webinar on How Trade Secrets Are Affected by the FTC’s Crackdown on Non-Competes
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    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.Continue Reading “Noisy Exit” of FTC Commissioner Christine Wilson Signals Increasingly Contentious Efforts to Regulate Non-Compete Clauses at Federal Level for Foreseeable Future

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    There have been some significant developments since the FTC announced its proposed rule banning non-competes in early January.

    First, the FTC will be hosting a virtual public forum on its proposed rule on February 16th from 12 p.m. to 3 p.m. Eastern.

    The forum is open to the public (see agenda for the forum here). The commission will…

    Continue Reading The Non-Compete Crackdown Continues: FTC Hosts Public Forum on Proposed Rule to Ban Non-Competes, Biden Attacks Non-Competes in State of Union Speech, and FTC Commissioner Wilson Resigns
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    In this episode, Scott Mallery, Dan Hart, and Robert Milligan discuss the FTC’s authority to issue such a broad proposed regulation, and what constitutional challenges to that authority will likely look like. In addition, we discuss legislation that has been introduced in Congress that would not only do essentially the same thing the FTC’s proposed rule would do…

    Continue Reading Policy Matters Podcast: FTC’s Crackdown on Non-Competes Through Agency Rulemaking Part 2
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    The FTC’s proposed rule banning non-competes with employees and workers has now been published in the Federal Register.

    The rule would provide that noncompete clauses are an unfair method of competition and as a result, the rule would ban employers from entering noncompete clauses with their employees and workers (defined by the FTC to include independent contractors and others). The rule would require employers to rescind existing noncompete clauses with workers and actively inform their employees that the contracts are no longer in effect. The rule would include a limited exception for non-compete clauses between the seller and buyer of a business. This exception would only be available where the party restricted by the non-compete clause is an owner, member, or partner holding at least a 25% ownership interest in a business entity.Continue Reading Comments on FTC’s Proposed Rule Banning Non-Competes With Employees and Workers Now Due March 20th 

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    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?
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    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:Continue Reading Answering the $296 Billion Question: FTC’s Proposed Rulemaking on Worker Non-Competes Likely to be Found Unconstitutional

    Thursday, January 12, 2023
    3:00 p.m. to 4:00 p.m. Eastern 
    2:00 p.m. to 3:00 p.m. Central
    1:00 p.m. to 2:00 p.m. Mountain
    12:00 p.m. to 1:00 p.m. Pacific

    REGISTER HERE

    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?
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    Earlier today, the Federal Trade Commission (“FTC”) published a proposed rule which would ban all non-compete agreements between employers and “workers” (broadly defined to include employees, independent contractors, interns, and others). If adopted, the proposed rule will bar both prospective and existing non-compete agreements. The FTC included an overview fact sheet describing the proposed rule.

    The FTC is seeking public comment on the proposed rule, which is based on a preliminary finding that non-competes constitute an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act. This proposed rule aligns with the FTC’s recent statement to attempt to reinvigorate Section 5 of the FTC Act, which bans unfair methods of competition.Continue Reading FTC Proposes Rule Banning Use of Non-Competes with Employees and Workers and Limiting Employer Protections Against Unfair Competition