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| 1 minute read

In Case You Missed It: FTC's Forum Examining Proposed Rule to Ban Noncompete Clauses

On February 16, the FTC held a forum examining its recently proposed rule to ban noncompete clauses, which would make the use of a noncompetition agreement an "unfair method of competition" under Section 5 of the Federal Trade Commission Act. The forum featured introductory and closing comments from FTC Chair Lina Khan and Commissioner Alvaro Bedoya, a quick recap of the proposed rule, a panel of speakers with personal experience, and a myriad of public comments. In case you missed it, here are a few key arguments: 

Those who supported the rule spoke out about depressed wages, a lack of mobility, protracted litigation, and poor working conditions resulting from the use of noncompete agreements. Specifically, speakers from the healthcare industry discussed the negative implications of noncompetition agreements for physicians and nurses, including negative patient outcomes and the loss of clinical decision-making. Many proponents of the rule noted that these deleterious effects are compounded by corporate or private equity control and consolidation over industries, including healthcare. Other trade associations, franchisee representatives, and representatives from the logistics and tech industries voiced support for the proposal.

Critics of the rule highlighted many common concerns. First and foremost, many commenters expressed the opinion that the proposed ban, which has few exceptions, constitutes a blanket ban which should be more narrowly tailored before the rule is finalized, particularly for high-level executives or employees with strategic or trade secret knowledge. Additionally, critics of the proposed rule echoed the concern that the FTC has overstepped its Congressional authority. Further, critics urged the FTC to look into alternatives that would reflect these and more nuances and to consider extending the time to comment, in order to fully evaluate these alternatives.

Want to weigh in, joining over 11,000 comments to date? The FTC is still accepting comments on the rule until March 20, 2023. A transcript of the forum will be published by the FTC for public view.


antitrust and competition, employment law, regulation