The Federal Trade Commission is expected to vote next April on the final version of its proposal to ban noncompete agreements in employment contracts, according to a person familiar with the matter.
The agency received nearly 27,000 comments on the draft rule proposed in January. Banning most noncompetes would impact about 30 million Americans and boost wages by nearly $300 billion per year, the FTC estimated.
The commission will follow a process similar to rulemaking at other federal agencies, especially given the high number of comments, according to the person. Staff will consider changes to the rule once they’ve reviewed the comments, the person said.
PODCAST: The first episode in a new series exploring the FTC’s proposal for a near-total ban on noncompete agreements.
The proposed rule has garnered support from labor and advocacy groups, along with Democrats in Congress. Industry groups, led by the US Chamber of Commerce, have opposed the rulemaking, arguing the FTC lacks the proper statutory authority and threatening to sue if it’s finalized in its current form.
A 16-month turnaround on rulemaking isn’t out of the ordinary, said Cary Coglianese, a professor at the University of Pennsylvania Law School.
“Sixteen months would be plenty of time to develop a new rule, especially if an agency is working on a concentrated basis,” Coglianese said. “If there is the ability to focus and they manage to get the rule done on that schedule, there’s nothing to say the agency couldn’t manage and do a good and responsible job on that rulemaking.”
The FTC had spent about $500,000 on the rulemaking effort by late February, according to a letter from the agency sent to House Judiciary Committee Chairman Jim Jordan (R-Ohio) that was obtained by Bloomberg Law under the federal Freedom of Information Act.
At that point, 47 agency employees, contractors, advisers and consultants had spent more than six thousand hours on the rulemaking, the FTC said in the letter.
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