The FTC issued a notice of proposed rulemaking that will affect the employment relationships of approximately 30 million workers.
The FTC is seeking to ban non-compete clauses, defined as a contractual term preventing a worker from seeking or accepting employment with a person, or operating a business. The proposed rule defines worker broadly, encompassing employees and independent contractors.
The rule will also require employers to rescind existing non-compete clauses within six months of its finalization. Employers will have to notify current and former workers with non-competes that the clause is no longer in effect.
The rule will not prevent employers from enforcing reasonably restrictive trade secret agreements, non-solicitation agreements, and non-disclosure agreements to protect their investments. However, it does not adequately define these agreements.
The FTC has opened a sixty-day comment period on the proposed rule; SCI encourages you to let your voice be heard. To leave a comment, visit regulations.gov.
For more detailed information, click here.