The feds are coming for your company's noncompete agreements.

Date01 February 2023
AuthorMeyer, Eric B.

The Federal Trade Commission proposed a new rule on Jan. 6 prohibiting employers from imposing non-competes on their workers. Below are some of the biggest questions regarding the huge announcement.

Q. What is the FTC doing?

A. The FTC's proposed rule would generally prohibit employers from using noncompete clauses. Specifically, it would make it illegal for an employer to enter into or attempt to enter into a noncompete with a worker.

Q. What is a "worker"?

A. Worker means a natural person who works, whether paid or unpaid, for an employer. The term includes, without limitation, an employee, individual classified as an independent contractor, extern, intern, volunteer, apprentice or sole proprietor who provides a service to a client or customer.

The term "worker" does not include a franchisee in the context of a franchisee-franchisor relationship; however, it includes a natural person who works for the franchisee or franchisor. Noncompete clauses between franchisors and franchisees would remain subject to federal antitrust law as well as all other applicable law.

Q. When is the compliance...

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