On January 5", 2023, the Federal Trade Commission (the “FTC”) released a Notice of Proposed Rulemaking, which proposes the “Non-Compete Clause Rule” (the “Proposed Rule”). The Proposed Rule provides that an employer's use of non-competition clauses in employment agreements and other employee contracts would be an “unfair method of competition”, which is unlawful under Section 5 of the Federal Trade Commission Act. The FTC has instituted a 60-day public comment period to seek feedback on the Proposed Rule. While it is uncertain whether, when, or in what form the Proposed Rule will go into effect, employers should expect that federal and state antitrust agencies will continue to pursue their enforcement efforts against non-compete clauses and other provisions they view as restricting the free movement of labor.
