FTC Proposes Rule Banning Noncompete Clauses in Employment Contracts

Advocates say noncompete agreements hurt workers, limit competition, and stifle development

On January 5, 2023, by a 3-1 vote, the Federal Trade Commission (FTC) proposed regulations that would ban U.S. employers from using noncompete clauses in employment contracts. The sweeping new rule is intended to make it easier for workers to switch jobs and to promote competition in the labor markets. The ban would represent a meaningful shift in federal law regulating employment, eliminating the status quo patchwork of state rules that frequently allow noncompete agreements. For example, the state of California already prohibits non-compete clauses, but other states like Texas and Massachusetts allow them in many circumstances.

Lieff Cabraser’s Work for Employees in No-Poach Cases

Lieff Cabraser represents plaintiff employees fighting against improper mobility restrictions and pay suppression implemented by illegal “no-poach” agreements across a wide range of industries including rail workers, university academics, high-tech workers, and fast food franchisees. Our work in the landmark High-Tech Employee Antitrust case against industry giants including Apple, Adobe, Intel, and Google resulted in a $435 million settlement on behalf of employees that stands as the largest resolution in history of antitrust claims in the employment setting. Learn more about our no-poach cases.