In an article published in the March 3, 2023 issue of Tampa Bay Business Journal, shareholder Patrick Causey discussed the Federal Trade Commission’s (FTC) proposed rule, which, if implemented, would ban non-compete agreements nationwide. With such a drastic rule change on the table, Causey explained why it is imperative that employers, trade associations, law firms, and other stakeholders submit comments to the FTC for consideration.
“The rule not only prohibits employers from signing new non-compete agreements, but it would also automatically rescind existing agreements,” Causey said. “The rule would further impose a burden on employers to notify current and past employees within 45 days that the non-compete agreements are now void.”
He further addressed how several states have already passed similar legislation in recent years, so a more measured approach may be appealing to the FTC because it may increase the chances the rule withstands judicial scrutiny.
“First, although it is likely that the FTC will pass some ban on non-compete agreements, it is not a foregone conclusion that the FTC will ban non-compete agreements entirely,” he said. “Although advocating that the FTC should take no action might fall on deaf ears, the FTC’s three-commissioner majority might be open to adopting a less drastic rule, such as banning non-compete agreements for entry-level or low-wage employees.”
To read the full article, click here.