Letter to FTC re Non-Compete Clause Rulemaking

Authored Article


Brandon Bundren and over 100 lawyers from around the country who practice extensively in the area of trade secrets and restrictive covenants co-signed a written submission to the Federal Trade Commission regarding its recent noncompete ban. The submission explains lingering confusion about the use, enforcement, and impact of noncompete agreements; provides information in response to the FTC’s specific questions; and identifies elements of possible guidance or a rule that would achieve most of the Commission’s objectives, while balancing the competing interests at play (i.e., those of companies, workers, states, and the United States economy) and avoiding both significant unintended consequences that are likely to flow from the currently proposed rule and an over-reliance on academic literature, which has recently been called into doubt by (among others) the very author of much of the research. The submission addresses these issues from all three perspectives: employee, former employer, and new employer. And despite the broad range of clients of the signatories, our respective locations around the country, and the local, regional, or national scope of our respective practices, all of the signatories were in agreement about what to say in the submission: Federal regulation is likely inappropriate, is definitely premature, and, in any event, should be limited.