The FTC has asked for public comment on the proposed rule through March 10, 2023. After that, the FTC may make changes based on comments and further analysis of this issue before publishing a final version of the rule. Employers would then have 180 days from the date of publication to come into compliance with the rule’s requirements.
As currently written, the proposed rule will almost certainly be subject to legal challenges regarding whether the FTC has the authority to engage in such broad rulemaking. The enforceability of noncompetes has historically been left to the individual states. Forty-seven U.S. states currently permit noncompetes, including Florida, which allows noncompetes that are reasonable in time and geographic scope and supported by a legitimate business interest. In a statement by Sean Heather, U.S. Chamber Senior Vice President for International Regulatory Affairs and Antitrust, Heather called the FTC’s outright ban on noncompete clauses “blatantly unlawful.” He noted that “[s]ince the agency’s creation over 100 years ago, Congress has never delegated the FTC anything close to the authority it would need to promulgate such a competition rule.” According to Heather, “[t]he Chamber is confident that this unlawful action will not stand.”