Podcast - Exploring the FTC's Aggressive Effort to Limit Employment Agreements | Insights

Podcast – Exploring the FTC’s Aggressive Effort to Restrict Employment Agreements | Insights

Within the fifth episode of his “Clearly Conspicuous” podcast sequence, “Exploring the FTC’s Aggressive Effort to Restrict Employment Agreements,” shopper safety lawyer Anthony DiResta takes a take a look at the Federal Commerce Fee’s (FTC) proposed rule to ban non-compete clauses in employment agreements. On this episode, Mr. DiResta analyzes wide-ranging implications of the proposed rule and offers questions for firms to think about when submitting public feedback on it.

Hearken to extra episodes of Clearly Conspicuous right here.

Podcast Transcript

That is Tony DiResta, and I wish to welcome you to our fifth podcast of “Clearly Conspicuous.” As we have famous within the earlier periods, our purpose in these podcasts is to make you succeed on this aggressive present regulatory surroundings, make you conscious of what is going on on with each federal and state shopper safety businesses after which provide you with sensible ideas for fulfillment. It is a privilege to be with you right this moment. 

FTC’s Proposed Rule

In the present day we talked concerning the FTC’s aggressive effort to restrict employment agreements in all industries and for all staff. The subject is the FTC’s proposed rule to ban non-compete clauses in employment agreements. Final month, the Federal Commerce Fee issued a discover of proposed rulemaking in regards to the FTC’s initiative to ban employers from coming into into non-compete clauses with their staff. The rule would lengthen to all staff and would require firms to rescind present non-compete inside 180 days of the ultimate rule. For functions of the rule, non-compete provisions embrace specific and de facto non-compete agreements. This contains non-disclosure agreements written so broadly as to successfully ban working in the identical area post-employment, in addition to clauses that require paying unreasonable coaching prices if the employment terminates inside a specified interval. The said intention behind the proposal is to profit staff and encourage competitors, in response to FTC Chair Khan. About one in 5 Individuals right this moment is sure by a non-compete. With the determine hovering in sure industries, as much as 45 p.c, for instance, in tech, any change to present legislation would have broad and sweeping enterprise influence. It impacts all industries. Each firm that has non-compete with workers, apart from firms that wish to forestall an proprietor or companion who’s promoting a enterprise from instantly reentering the sphere, which might be exempt beneath the proposed rule. It issues. The proposal, if applied as proposed, would bar employers from coming into into or implementing non-compete with workers or impartial contractors, whereas additionally requiring firms to nullify any present non-compete inside six months. Adoption of the rule may have wide-ranging penalties, from fueling extra commerce secret litigation to altering the dynamics of pay negotiations for prime executives and key workers.

Inquiries to Think about When Submitting Feedback

You’ll be able to submit a public remark opposing this proposed rule. Some questions to think about: 

  1. Do you want to take into account submitting feedback on solely your organization’s behalf, or do you want to take into account becoming a member of within the feedback with different firms?
  2. Do you want to focus feedback primarily based on points particular to your organization, points particular to your trade or points particular to explicit facets of the rule or the FTC’s proposed options?
  3. With respect to the rule, are there explicit facets of the rule that you simply want to handle?
  4. With respect to the FTC’s proposed options to the rule, are there facets of the options that you simply want to handle?

Do you wish to problem the rule in feedback? There are a selection of authorized arguments to problem the proposed rule, and it’s your decision to check out FTC Commissioner Christine S. Wilson’s dissenting opinion towards the rule.

Key Takeaways

Listed here are the important thing takeaways. Your capability to have non-compete clauses in your employment contracts might finish. Feedback are essential. Please let me know if you would like to debate or if you would like to talk about me and the workforce to coordinate any feedback it’s possible you’ll want to present. Keep tuned for additional applications as we establish and handle the important thing points and developments on these points. I want you continued success and a significant day. Thanks a lot.

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