As we previously reported, on January 5, 2023, the Federal Trade Commission (FTC) issued a proposed rule that, if finalized, would make it unlawful for employers to require employees to agree not to compete with them for a specified period of time after leaving their employment. The rule would also make it unlawful for employers to require employees to agree not to solicit customers or employees from their former employer. Prior to finalization of a proposed rule, it must go through a public comment period. The comment period was originally set to expire on March 20, 2023, but has been extended to April 19, 2023.
The comment period allows the public to submit input before the agency makes a final decision on a proposed rule. After the comment period ends, the FTC will respond to comments and possibly make revisions before publishing a final rule. The final rule would take effect 180 days after the final version is published.
Next Steps for Employers
Employers who would like to submit comments should do so by the deadline of April 19, 2023. Comments may be submitted online under Regulatory Information Number (RIN) 3084-AB74.
HR Works will continue to monitor this topic and provide updated information as it becomes available.