FTC Forum Examining Proposed Rule to Ban Noncompete Clauses

The Federal Trade Commission will host a public forum on Thursday, February 16 examining the FTC’s proposed rule to prohibit employers from imposing noncompetes on their workers, and providing an opportunity for people to directly share their experiences with noncompetes.

The forum will supplement the FTC’s request for members of the public to submit written comments on the proposed rule, which is based on a preliminary finding that noncompetes constitute an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act.

The forum will be held virtually from 12 noon to 3 p.m. EDT. It will be webcast on the FTC’s website, transcribed, posted online, and included as part of the public record. The commission will hear from a series of speakers who have been subjected to noncompete restrictions, as well as business owners who have experience with noncompetes. After, members of the public will have an opportunity to comment via livestream. People can sign up to speak through a webform and will be heard on a first-come first-serve basis during the time available.

Companies impose noncompetes on workers across industries and job levels, from hairstylists and warehouse workers to doctors and business executives. Evidence indicates that noncompetes hurt workers and harm competition by blocking workers from pursuing better opportunities and by preventing employers from hiring the best available talent.

The FTC’s proposed rule generally would prohibit employers from using noncompete clauses, including independent contractors and anyone who works for an employer, whether paid or unpaid. Among other things, the rule would also require employers to rescind existing noncompetes and actively inform workers that they are no longer in effect.