The proposed rule, on which the FTC will accept comments for the next 60 days, would—
- Provide that noncompete clauses are an unfair method of competition, and, as a result, would ban employers from entering noncompete clauses with their workers, including independent contractors; and
- Require employers to rescind existing noncompete clauses with workers and actively inform their employees that the contracts are no longer in effect.
The FTC is also soliciting opinions on certain key issues, such as whether senior executives should be exempted from the rule, or subject to a rebuttable presumption rather than a ban; and whether low- and high-wage workers should be treated differently.
The agency has published a wealth of information, including the proposed rule itself and a fact sheet.
I have serious questions, specifically as to how a federal agency can enact a rule such as this, and whether a change of this magnitude must be enacted by law and not regulation. To me, this rule would go well beyond the FTC's rulemaking authority. Expect litigation to be filed in a business-friendly court, and for the Supreme Court to have the final say on this important issue. It is certainly far from a done deal that this proposed regulation will ever take effect. So keep those noncompete agreements in place, at least for now.
Here's what else I read this past week that you should read, too.
The USMNT's Gregg Berhalter saga just got weirder — via Deadspin
If You're Going to Rage Quit, Do It Right — via Evil HR Lady, Suzanne Lucas
My employee doesn’t want to come to work when it snows — via Ask A Manager
Court will mull scope of attorney-client privilege when lawyers give both legal and nonlegal advice — via SCOTUSblog
How to Talk to Your Kids About Layoffs — via Harvard Business Review
Why Family Caregiving Is the Next Major Issue for Employers — via EntertainHR
Congress Passes Spending Bill with Employment Law Provisions Tucked Inside — via Dan Schwartz's
This company was so close to escaping an ADA lawsuit. Here’s what it did wrong. — via Eric Meyer's The Employer Handbook Blog
OSHA’s new program aims to reduce injuries in food manufacturing — via Crain's Cleveland Business
Where have all the secrets gone? Longer time passing — via Fair Competition Law