FTC Proposes Rule Banning Noncompete Clauses with Workers

On January 11, 2023, Cravath prepared a memo for its clients entitled “FTC Proposes Rule Banning Noncompete Clauses with Workers,” which examines the agency’s recent notice of a proposed rule banning noncompete clauses as a violation of Section 5 of the Federal Trade Commission Act. The memo outlines key takeaways from the proposed rule and recent noncompete clause enforcement actions, as well as legal issues concerning the FTC’s rulemaking authority. The memo also concludes that the FTC’s decision to ban noncompete clauses reflects the agency’s desire to expand its authority and use competition rulemaking to address labor concerns, as well as other issues.

Please click here to read the memo.