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ANALYSIS: A Last Hurrah for Noncompetes?

Jan. 18, 2023, 4:14 PM

If the Federal Trade Commission has its way, noncompete clauses will soon vanish from employment contracts. The commission’s notice of proposed rulemaking, announced Jan. 5, would effectively ban all noncompete clauses between employers and workers, both prospectively and retroactively, on antitrust grounds (an unfair method of competition).

Noncompete clauses have come under increasing scrutiny from federal and state regulators for their negative effect on competition for employee talent. If adopted as proposed, the new rule is expected to have a favorable impact on worker mobility and wages, particularly for lower-paid employees. Employers, on the other hand, will need to ...