Earlier today, the Federal Trade Commission (FTC) unveiled a proposed rule that would largely ban employers from imposing noncompete restrictions on workers. The FTC’s proposed ban would extend to nearly all work arrangements – including to independent contractors, apprentices, interns and externs, unpaid and volunteer positions, as well as regular employees. In addition to prohibiting employers from entering into noncompete agreements with workers, the proposed rule would also require employers to rescind existing noncompete restrictions on workers. The FTC estimates that banning noncompete restrictions will open new job opportunities for 30 million Americans and raise wages by at least $250 billion per year.
The proposed rule is not final. The FTC will accept public comments on the proposal for 60 days and will consider those comments prior to issuing a final rule. It is almost certain the rule will face legal challenges as well.