James J. Oh, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Chicago office, authored an article in Managed Healthcare Executive, titled “Don’t Panic. Or Don’t Get Your Hopes Up: The FTC’s Proposed Rule Banning Non-Competes May or May Not Go into Effect”.
Following is an excerpt:
“DON’T PANIC” is perhaps the best advice offered in “Hitchhiker’s Guide to the Galaxy” by Douglas Adams (although some would argue that “always carry a towel” is better). For those who are worried that their restrictive covenants will no longer be enforceable, don’t panic. The FTC’s proposed rule announced on Jan. 5, 2023, banning non-compete agreements may never become final.
Comments on the rule were due to the FTC on March 20, but the FTC extended the comment period to April 19, a sign that the FTC is being inundated with comments.
Which camp is submitting more comments, the “ban the ban” or “adopt the ban” camp? Regardless, with a mandatory 180-day notice period that follows the comment period, the rule cannot go into effect any earlier than mid-October of this year. Even if the ban wins the popular vote, this FTC, under this administration, will likely declare that it is the will of the people that the non-compete ban be adopted.