There have been some significant developments since the FTC announced its proposed rule banning non-competes in early January.
First, the FTC will be hosting a virtual public forum on its proposed rule on February 16th from 12 p.m. to 3 p.m. Eastern.
The forum is open to the public (see agenda for the forum here). The commission will hear from a "series of speakers who have been subjected to noncompete restrictions, as well as business owners who have experience with noncompetes." After, members of the public will have an opportunity to comment via livestream. People can sign up to speak through a webform and will be heard on a first-come first-served basis during the time available.
According to the FTC, the forum will examine the "FTC's proposed rule to prohibit employers from imposing noncompetes on their workers, and providing an opportunity for people to directly share their experiences with noncompetes."
The FTC indicated that the forum will supplement the FTC's request for members of the public to submit written comments on the proposed rule, which is based on the FTC's preliminary finding that non-competes constitute an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act. At this point, the written public comment period ends March 20th, despite 100 business organizations requesting a 60 day extension on the deadline.
The FTC's proposed rule generally would prohibit employers from using non-compete clauses, including independent contractors and anyone who works for an employer, whether paid or unpaid. The rule would also require employers to rescind existing non-competes and actively inform workers that they are no longer in effect.
Next, during President Biden's State of the Union speech last week, he made several critical comments about non-compete agreements and he supports the FTC's proposed ban on non-competes. He stated, "30 million workers had to sign non-compete agreements when they took a job. So a cashier at a burger place can't cross the street to take the same job at another burger place to make a couple bucks more. Not anymore. We're banning those agreements so companies have to compete for workers and pay them what they're worth."
Lastly, Christine S. Wilson, the FTC's only Republican member, indicated in an op-ed in the Wall Street Journal Tuesday, that she plans to leave the agency, citing Chair Lina Khan's "disregard for the rule of law and due process." She accused FTC leaders of abusing government power and questioned their honesty and integrity. "I have failed repeatedly to persuade Ms. Khan and her enablers to do the right thing, and I refuse to give their endeavor any further hint of legitimacy by remaining," Wilson wrote. "Accordingly, I will soon resign as an FTC commissioner."
The fever charged climate concerning the FTC's proposed non-compete ban continues to heat up.
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