In the wake of the Federal Trade Commission’s (FTC) proposed regulation banning noncompete agreements except in limited circumstances, a bipartisan Senate group led by Democrat Senator Chris Murphy of Connecticut and Republican Senator Todd Young of Indiana introduced the Workforce Mobility Act of 2023 on February 1, 2023. If enacted, the legislation would effectively eliminate noncompete agreements entered into after the bill becomes law.
Read the full Alert on the Duane Morris LLP website.
Just one day after entering into consent agreements invalidating non-competes with three companies, on January 5, 2023, the Federal Trade Commission (FTC) proposed a new non-compete rule that would prohibit employers from entering into, maintaining, enforcing or threatening enforcement of a non-compete clause with virtually any worker and invalidate existing non-compete clauses with both current and former workers. If the non-compete rule is finalized by the FTC in the same or substantially same form as proposed, and if it survives the legal challenges that are sure to follow, the non-compete rule would make non-compete clauses an unfair method of competition under Section 5 of the FTC Act, regardless of inconsistent state statutes, regulations, orders or interpretations, and would represent a sea change in the law relating to non-compete clauses in the United States.
Rea the full Alert on the Duane Morris LLP website.
On January 4, 2023, the U.S. Federal Trade Commission (FTC) took legal action for the first time to prohibit the use of noncompete restrictions by three companies and their executives. In doing so, the FTC flexed its newly reestablished standalone authority under Section 5 of the FTC Act. In a partisan 3-to-1 vote, the FTC commissioners voted to issue administrative complaints and accept consent agreements that prohibit the firms and their executives from imposing, attempting to impose, enforcing or threatening to enforce noncompete agreements on a broad swath of covered workers. The orders also require the firms to provide written notice to the thousands of impacted workers that the noncompete agreements are null and void.
Read the full Alert on the Duane Morris LLP website.
On November 10, 2022, the Federal Trade Commission (FTC) issued a policy statement that significantly expands the scope of what the FTC considers “unfair methods of competition” under Section 5 of the FTC Act (the “Policy Statement”). The announcement comes more than a year after the FTC rescinded its previous policy against pursuing “standalone” Section 5 Unfair Methods of Competition claims and interpreting Section 5 as coextensive with the Clayton and Sherman Acts. The Policy Statement appears to align with FTC Chair Lina Khan’s goal of increasing enforcement of conduct the FTC deems to be unfair regardless of whether it violates the Sherman and Clayton Acts.
Read the full Alert on the Duane Morris LLP website.
