The federal effort to ban non-competes
In the world of restrictive covenants, 2023 got off to a hot start when, in early January, the Federal Trade Commission (FTC) issued a Notice of Proposed Rulemaking (NPRM) to broadly ban the use of non-compete covenants nationally. Now, Congress has stepped into the fray, with a bipartisan group of Senators reintroducing a bill that, like the FTC’s proposed rule, would ban non-compete agreements across the country in most circumstances.
The Workforce Mobility Act of 2023
The Workforce Mobility Act of 2023, previously introduced in 2019 and 2021, was reintroduced by Senators Christopher Murphy (D-Conn.) and Todd Young (R-Ind.) and is co-sponsored by Senators Tim Kaine (D-Va.) and Kevin Cramer (R-N.D.). If passed, the Act would codify the use of employment non-competes as an unfair trade practice under federal law. The Act provides that, with certain limited exceptions, “no person shall enter into, enforce, or attempt to enforce a noncompete agreement with any individual who is employed by, or performs work under contract with, such person with respect to activities of such person in or affecting commerce,” and that noncompete agreements will have no force or effect. For a more detailed look at the Workforce Mobility Act of 2023, see our article, Bipartisan Bill to Ban Most Non-Compete Agreements Reintroduced in U.S. Senate.
The FTC’s Proposed Rule
Jackson Lewis previously addressed the details of the FTC’s proposed ban on non-competes in its article, A Deeper Dive Into FTC’s Proposed Non-Compete Rule. Now, Jackson Lewis attorneys Erik Winton, Cliff Atlas, Daniel Doron, and Daniel Thornton take a look at the history leading to the proposed rule, including how the FTC appears to have largely ignored the finding and conclusions presented by outside experts during a January 2020 public workshop, conducted by the Commission to examine the legal basis and empirical support for a rule restricting non-competes. See our article, Against the Evidence: How the FTC Cast Aside the Input of Experts at Its Own Non-Compete Workshop.
Cliff Atlas and Erik Winton also discussed the FTC’s proposed rule during a recent podcast, as part of the Jackson Lewis podcast series, The Year Ahead. That podcast can be found here: The Year Ahead in the Proposed FTC Rule Banning Non-Competes.
