The Federal Trade Commission (FTC) has proposed a new rule which would ban employers from imposing noncompete agreements on workers, and would rescind all existing noncompete agreements. The rule has been applauded by the Economic Policy Institute, who argue that these agreements limit worker power in comparison to employers. The FTC's proposal would not ban other types of employment restrictions, such as non-disclosure or non-solicitation agreements, but the FTC would still review these agreements to ensure they are not functioning as noncompetes.
The proposed rule will now be open for public comment for 60 days before being reviewed and potentially amended by the FTC, and further deliberation may extend the timeline. It is unclear how long it will take to finalize the rule, but it is likely to face legal challenges due to its broad parameters. The implications of the proposed rule remain to be seen, but it is a step towards ensuring fair practices in the workplace.
The FTC's proposed rule is one which could have a major impact on the workforce, and it will be interesting to see how it develops over the coming months. It is important that employers and workers alike are aware of the proposed rule, and have time to consider the potential implications of it.