Fresh off the significant buzz from the Federal Trade Commission’s (“FTC”) January 5, 2023 announcement of its Notice of Proposed Rule Making (“NPRM”) setting forth a ban on all non-compete clauses between employers and workers, first reported by Polsinelli’s Labor & Employment team in the January 6, 2023 Polsinelli at Work Blog, the NPRM was published in the Federal Register on January 8, 2023. The sixty-day comment period for this proposed rule ends on March 10, 2023. If the rule is finalized in its current form, the FTC anticipates that it will impact nearly thirty million workers that are subject to these types of restrictive covenants. The FTC also estimates that eliminating non-competes could result in $300 billion in additional wages for these workers.

The response to the NPRM has been extreme, ranging from calling the proposed rule “an enormous boon to workers all across the United States” to “blatantly unlawful." Appreciating the magnitude and impact of this unprecedented proposal, FTC Chair Lina Khan penned her own piece in the New York Times trying to calm the public response, writing that “[a]t this stage, the F.T.C.’s proposed rule is just that — a proposal. The public is invited to weigh in during the open commenting period. Hearing from a broad range of voices — including entrepreneurs, employers and workers who have been subject to non-competes — will help ensure that our efforts are based in reality, not abstract theories."

As outlined in the Polsinelli at Work Blog post, attorneys can assist with alternative but practical ways by which clients can manage the risks and ramifications associated with this rule if it is finalized, while still protecting the underlying corporate interests connected to a non-compete provision.