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March 8, 2023
On March 6, the Federal Trade Commission announced that it is extending the comment period for its proposed rulemaking on banning noncompete agreements, from March 20 to April 19. ABC will be commenting in opposition to the proposed rule, which is overly restrictive on well-established and reasonable business practices in the construction industry. The public can submit comments at regulations.gov.
On Jan. 31, 100 organizations, including ABC, signed a letter urging the FTC to extend the comment period for its proposed rulemaking on banning noncompete agreements for an additional 60 days. The groups argued that the regulated community should be given sufficient time to assess the potential consequences of the rulemaking and develop insightful comments for the FTC to consider.
In addition, on Feb. 28, ABC joined 260 organizations in writing to Congress, urging lawmakers to exercise their oversight and appropriations authority to rein in FTC’s unauthorized rulemaking banning noncompete agreements. The FTC lacks the constitutional or statutory authority to issue such a rule and, in attempting to do so, the agency is improperly usurping the role of Congress.
Background:
On Jan. 5, the FTC issued a proposed rule that would ban all noncompete agreements with limited exceptions. According to the FTC, the proposed rule would make it illegal for an employer to:
On Feb. 2, ABC hosted a webinar to highlight how the proposed rule will affect members and why the FTC’s action is constitutionally suspect and open to a strong legal challenge.
On Feb. 16, the FTC hosted a public forum examining the FTC’s proposed rule to prohibit employers from imposing noncompetes on their workers. The FTC heard from a series of speakers who have been subjected to noncompete restrictions, as well as business owners who have experience with noncompetes.
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