The Federal Trade Commission announced that it is extending, to April 19, the comment period for the public to comment on the FTC’s proposed rule that would ban essentially all noncompete clauses in employee contracts. The FTC does not have regulatory authority over banks, but it does have authority over bank affiliates.
The proposed rule would make it illegal for an employer to enter into a noncompete contract with a worker, maintain a noncompete contract with a worker, or tell a worker—under certain circumstances—that the worker is subject to a noncompete agreement. It would apply to independent contractors and anyone who works for an employer, whether paid or unpaid, the agency said. It would also require employers to rescind existing noncompete agreements and actively inform workers that they are no longer in effect, and includes a limited exception for clauses between the seller and buyer of a business where the seller holds at least a 25 percent ownership interest in the business. Read the FTC’s comment period extension announcement. Read the proposed rule. For more information, contact ABA’s Jonathan Thessin.
