A Close Look at the Federal Trade Commission’s Proposal to Ban Noncompete Agreements

February 9, 2023
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With one Republican Commissioner dissenting, the FTC has issued a notice of proposed rulemaking that would ban noncompete agreements between employers and workers nationwide, both prospectively and retroactively. If finalized, the proposal would impact nearly all nonbanks in the consumer financial services industry. We first review the practices that the proposal would prohibit, the types of employers and categories of workers it covers, and the types of agreements it covers, including the proposal’s narrow exceptions. We then discuss the current state law approach to noncompete agreements, existing protections for trade secrets and confidential information, likely policy and legal challenges to the FTC’s proposed exercise of rulemaking authority, and alternative approaches proposed by the FTC. We conclude with a discussion of steps employers should consider taking to be prepared if the FTC finalizes the proposal.

Alan Kaplinsky, Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, hosts the conversation, joined by David Fryman, a Partner in the firm’s Labor and Employment Group, and Karli Lubin, an Associate in the Labor and Employment Group.

View the recording transcript here. 

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