FTC Proposes to Ban Non-Competes

On January 5, 2023, the Federal Trade Commission (the “FTC”) proposed a rule that would effectively ban non-compete clauses between employers and “workers,” to include a broad range of workers such as executives, independent contractors, interns, externs, volunteers, apprentices, and sole proprietors who provide services to a client or customer. Even some unusually broad non-disclosure and other agreements that effectively act as non-compete agreements could be prohibited. There is only one limited exception in the proposal, agreements between a seller and a buyer of a whole business where the person prohibited by the non-compete owns at least 25% of the business entity. Comments are due 60 days after publication in the Federal Register. The final rulemaking is almost certain to draw litigation, but it is clear, given this proposal, press coverage and labor comments, that some sort of limitation on non-competes is in the works.