On Jan. 5, the Federal Trade Commission (FTC) issued a proposed rule that would prohibit employers from including provisions in contracts with workers that prevent them from leaving to work for a competitor or starting a competing business after their employment (referred to as noncompetes). The rule would not apply to employers that are nonprofit entities. Â
The law defines workers as including employees, independent contractors, apprentices, externs, interns, and volunteers. If finalized, employers (as defined in the rule) would be prohibited from entering into a noncompete agreement with a worker and required to rescind all existing noncompete agreements. Â
The public may submit comments in response to the proposed rule by March 6. Legal challenges to the proposed rule are anticipated. Â