Noncompete Agreements -- To End In 2024 -- If Biden's FTC Has Its Way -- June 5, 2023

Locator: 44843MISC.  

ICYMI, from Bloomberg:

COMPANIES THAT USE noncompete agreements to limit workers’ future employment prospects can expect greater legal scrutiny now that a second federal agency has marked the restrictive covenants as enforcement targets. 

National Labor Relations Board General Counsel Jennifer Abruzzo said this week that noncompete pacts violate federal labor law, with narrow exceptions. 

Her statement isn’t binding precedent. 

But the problem for private employers subject to the labor board’s authority is the immediacy of the enforcement threat. 

The Federal Trade Commission is developing a rule that would ban noncompete agreements economy-wide, with the commission eyeing April 2024 for a vote on a final rule. By contrast, employees can now file an unfair labor practice charge with the labor board, which begins the enforcement process. 

THE FTC WILL LIKELY have to prevail in court in order to enforce a regulatory ban on noncompetes. The US Chamber of Commerce and other business groups have vowed to fight a final rule in court.