Restrictions on Noncompetes: Preparing for Potentially Sweeping FTC Noncompete Regs

Enforceability of Recent Executive Order to Promote Competition

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Wednesday, October 26, 2022

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, September 30, 2022

or call 1-800-926-7926

This CLE course will advise employment counsel about how to prepare for changes signaled by the executive order (EO) President Biden signed regarding noncompete agreements. As requested by the EO, the Federal Trade Commission (FTC) proposed regulations to curtail the use of noncompete clauses and other clauses or agreements that may limit worker mobility. The panel will discuss the proposed FTC rules and the state law trend of curtailing the use of restrictions on employee mobility, such as noncompete agreements.

Description

Noncompete agreements and restrictions in employment have endured some significant pushback as of late. A prominent example involved Jimmy John's and its agreements restricting its sandwich makers. Illinois and New York's Attorney Generals challenged Jimmy John’s use of these noncompetes; Jimmy John’s stopped using noncompetes for low-level workers. Jimmy John's is one of the most well-known examples of noncompete overuse, but it's by no means the only example.

On July 9, 2021, President Biden signed the sweeping Executive Order on Promoting Competition in the American Economy, which, among other initiatives, "encouraged" the FTC to use its statutory rulemaking authority "to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility." While efforts to curtail the use of noncompetes are not new, this latest executive action could signal increased momentum toward nationwide restrictions banning or restricting the use of noncompetes for workers in a wide range of industries. The White House's explanatory fact sheet clarifies that "the President encourages the FTC to ban or limit non-compete agreements." A nationwide rule regarding noncompetes would be an unprecedented move by the federal government.

Previously, the states regulated noncompete agreements. More than half of all states passed legislation reining in noncompete law; 11 states and D.C. limited the enforcement of noncompetes by setting minimum compensation criteria, while others established time limits on the period of restriction. The Executive Order and accompanying fact sheet do not offer details on whether these are the types of limitations the FTC should consider. Still, they represent common compromises that are short of an outright ban on noncompetes.

Although the FTC's administrative rulemaking process regarding noncompete agreements has not yet been initiated, employers should immediately consider reviewing their workers' noncompete agreements and employment policies to comply with changing state law and consider future possible federal action limiting the enforceability of such agreements.

Listen as our expert panel guides employment counsel on state and federal law related to noncompete enforcement as the rules evolve. What steps should counsel advise employers seeking to protect their businesses now?

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Outline

  1. History of noncompete regulation
  2. Biden Executive Order
  3. FTC possible regulations
  4. Future of noncompete beyond low-wage workers
  5. Best practices for employers in the future seeking to limit unfair competition and protect their businesses

Benefits

The panel will review these and other critical issues:

  • What does the Promoting Competition in the American Economy Executive Order accomplish?
  • What has the FTC stated or implied regarding its proposed rulemaking?
  • How have states handled restrictions on noncompetes?
  • How can counsel best address the potential limitations on using noncompetes when developing employment policies in the future?

Faculty

Beck, Russell
Russell Beck

Partner
Beck Reed Riden

Mr. Beck is a business, trade secrets, and employee mobility litigator, nationally recognized for his trade secrets and...  |  Read More

Bindra, Amit
Amit S. Bindra

Partner
The Prinz Law Firm

Mr. Bindra focuses his practice on employment and executive agreements, noncompete, non-solicit and trade secret...  |  Read More

Chun, John
John H. Chun

Partner
Herrick

Mr. Chun is a partner in Herrick's Restructuring & Finance Litigation Department. He is a seasoned litigator...  |  Read More

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Early Discount (through 09/30/22)

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Early Discount (through 09/30/22)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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