FTC Seeks Feedback on Proposed Rule on Use of Non-Competition Agreements

The Federal Trade Commission (FTC) recently announced that it will host a virtual public forum on Thursday, February 16, 2023, from noon to 3 p.m. ET to elicit reaction to the FTC’s proposed rule on the use of non-competition agreements, as well as certain non-solicitation and non-disclosure agreements. 

The purpose of this forum is to examine the proposed rule and provide an avenue for individuals, including both employees and employers, to voice their opinions and discuss their experiences with non-compete agreements. At the forum, individuals can provide comment through livestream or those who wish to speak live can sign up here. Speakers will be chosen on a first-come, first-serve basis during the allotted time.

Since the FTC’s January 5, 2023, announcement of the new rule, the FTC has welcomed public comments. The public has until March 20, 2023, to submit such comments for the FTC to review and determine if changes to the rule are needed. The virtual public forum is one avenue to provide such comments.

The proposed rule comes as the Biden administration has increased efforts to combat alleged anticompetitive activity by American businesses and to increase employee mobility. In fact, President Biden gave the proposed rule prime billing in his State of the Union Address on February 7, 2023, where he made the case that non-compete agreements are unfair barriers to employee mobility and a tool to reduce wages and stifle competition.

Due to the potentially broad implications of the FTC proposed rule if adopted, we recommend that employers closely monitor the FTC’s proposed rule as it progresses through the rulemaking process and provide comment where appropriate.