By: Jessica Jackler
On January 5, 2023, the Federal Trade Commission (FTC) released a Notice of Proposed Rulemaking 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. It would require employers to rescind existing noncompete clauses with workers and actively inform them that the clauses are no longer in effect.
The proposed rule will undergo a comment period and will likely face great opposition before it may become final and applicable to employers.
Practice Pointer: Until the proposed rule becomes final and goes into effect, employers may continue to enforce and enter into new noncompete clauses with their workers, subject to applicable state laws.