On January 5, 2023, the Federal Trade Commission (“FTC”) issued a proposed rule that would prohibit almost all non-compete agreements between employers and workers (e.g., employees and independent contractors).

The FTC’s proposed rule is broad in a number of respects and would apply to almost any form of non-compete, with the exception of an express carve-out for non-competes associated with the sale of a business. The proposed rule would apply to the establishment of non-competes, the enforcement of non-competes, and any implication that an employee is subject to a non-compete (even when there is no actual agreement in place).

The Proposed Rule was likely prompted at least in part by President Biden’s July 2021 Executive Order, that, among other things, encouraged the FTC to exercise its statutory rulemaking authority to curtail the unfair use of non-compete clauses.

Additional information regarding the FTC’s proposed rule can be found in an alert from our antitrust team (here) and a post from our employment team on President Biden’s Executive Order (here).