Erik W. Weibust, Member of the Firm in the Litigation & Business Disputes and Employment, Labor & Workforce Management practices, in the firm’s Boston office, was quoted in Business Insurance, in “FTC Proposed Ban on Noncompetes May Face Strong Resistance,” by Judy Greenwald.
Following is an excerpt:
The U.S. Federal Trade Commission earlier this month proposed a sweeping ban on noncompete agreements in employment contracts, but opponents say its implementation could be delayed or prevented by litigation charging the agency has exceeded its authority.
Others, though, welcomed the move, saying a ban would increase wages and promote economic development in states that don’t already have such provisions.
The insurance sector, which has seen a proliferation in employment-related litigation, particularly among brokers, over the past several years, may be less affected than other businesses because companies in the sector usually rely on nonsolicitation or nondisclosure agreements rather than blanket noncompetes. The FTC proposal, though, does create some uncertainty on the issue, experts say.
The 216-page proposal issued Jan. 5 would ban employers nationally from imposing noncompetes on their workers, regardless of their salary level, and would apply retroactively.
Noncomplete clauses vary, but they often bar workers from working for a competing company while they are working for or after they leave an employer for a certain period or in a certain region.
The agency said stopping noncompetes could increase wages by nearly $300 billion per year and expand career opportunities for 30 million workers. …
Many observers say the FTC has exceeded its authority. It “doesn’t have the authority to regulate noncompetes whatsoever, much less ban them,” said Erik W. Weibust, a partner at Epstein Becker Green P.C. in Boston. “Noncompetes have been regulated by the states for over 200 years, long before the FTC even existed.”
