FTC Proposed Rule to Ban Employment-Based Noncompetes: Key Workplace Implications
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Employment and Workers Comp
- event Date
Wednesday, March 22, 2023
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE webinar will brief employment counsel, business and IP litigators, and HR personnel on the Federal Trade Commission’s (FTC) new proposed rule prohibiting the use of employment-based noncompetes in virtually all circumstances that the FTC contends violate Section 5 of the Federal Trade Commission Act (FTCA). The panel will highlight recent FTC regulatory developments, potential limits, exceptions, and best practices for counsel to take when advising clients on potential alternatives for safeguarding confidential information and trade secrets and for protecting other lawful business interests.
Mr. Beck is a business, trade secrets, and employee mobility litigator, nationally recognized for his trade secrets and noncompete experience. A leading authority on the law of trade secrets, noncompetes, and employee mobility, he literally wrote the law, wrote the book, and teaches the course on noncompete law in Massachusetts. Similarly, Mr. Beck revised the Massachusetts Uniform Trade Secrets Act, wrote the books Trade Secrets Law for the Massachusetts Practitioner (1st ed. MCLE 2019) and Negotiating, Drafting, and Enforcing Noncompetition Agreements and Related Restrictive Covenants (6th ed., MCLE, Inc. 2021), teaches the course Trade Secrets and Restrictive Covenants at Boston University School of Law, and co-hosts a podcast on trade secrets and restrictive covenants called Fairly Competing.
Mr. Bindra focuses his practice on employment and executive agreements, noncompete, non-solicit and trade secret disputes, business consulting, executive career counseling, appeals, whistleblower claims, employment arbitration agreements, unpaid wages, and employment discrimination. He has extensive experience working with executives physicians, and corporations. Mr. Bindra was also one of the lead architects and drafters of an amendment to the Illinois Freedom to Work Act that significantly reformed how noncompete and non-solicit agreements are litigated in the state of Illinois. He testified in support of the law and helped bring together a bipartisan coalition of support. As a result, the amendment passed with unanimous support in the Illinois legislature in 2021.
Mr. Weibust represents clients in commercial litigation matters, including franchise, distribution, and real estate disputes, to name a few. He has substantial case management experience from the early stages of litigation through the appeals process, including investigations, discovery, mediation, and trial and arbitration, as well as litigation avoidance.
Under the proposed rule, the FTC defines a noncompete clause as "a contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker's employment with the employer." The FTC argues that noncompetes constitute an unfair method of competition and therefore violate Section 5 of the FTCA. Proponents of noncompetes argue that they are necessary to protect legitimate business interests from unfair competition.
Currently, the FTC has filed only a Notice of Proposed Rulemaking and is seeking public comment on the proposed rule as to whether franchisees should be covered, the treatment of senior executives, the differences between low-income and high-wage workers, and other issues. The FTC estimates that this proposed ban on noncompetes could increase employee wages by nearly $300 billion per year and expand better career opportunities for approximately 30 million Americans.
Most importantly, if finalized, the proposed rule will require employers nationwide to rescind existing post-employment noncompetes and provide notice to current and former employees. The proposed rule defines "worker" broadly as employees, independent contractors, interns, and volunteers. Under the proposed rule, noncompetes can include broadly written nondisclosure agreements, training repayment agreements, and other restrictive clauses that protect against unfair competition. It is important to note the FTC does not have jurisdiction over banks, credit unions, nonprofits, or savings and loans institutions. The proposed rule includes an exception for noncompetes entered into in the context of a sale of a business since the rule's emphasis is on employment relationships.
Listen as our distinguished panel provides guidance on key workplace implications related to the FTC's proposed sweeping ban on employment-based noncompetes. The panel will offer best practices for reviewing current agreements and employment practices regarding restrictive covenants, trade secrets, and other proprietary business interests.
- Overview of the Proposed Rule
- Key definitions, limits, and other considerations
- Employer and employee implications
- Best practices for protecting legitimate business interests
The panel will cover these and other key issues:
- What were the regulatory developments leading up to the FTC's proposed ban on noncompetes?
- What are next steps and how can counsel guide clients in navigating the practical and legal considerations of the FTC's proposed rule?
- What are best practices for carefully crafting other types of restrictive employment covenants such as non-solicitation and non-disclosure agreements?
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