Non-Compete Clauses could be Banned

The Federal Trade Commission proposes preventing employers from entering into non-compete clauses with workers and requiring employers to rescind existing non-compete clauses. The proposal would ban or limit employment contract restrictive covenants that restrict workers' freedom to change jobs. The Commission estimates that the proposed rule would increase American workers’ earnings between $250 billion and $296 billion per year.

​Accordingly, the proposal, if adopted in its current form, could have far-reaching impacts on the agreements and arrangements that employers enter into with their C-suite and other key executives, as well as on other aspects of executive compensation.

The Commission invites the public to submit comments on the proposed rule. The FTC will review the comments and may make changes, in a final rule, based on the comments and on the FTC’s further analysis of this issue. The comment period is open through Mar 10, 2023.