As previously reported, the Federal Trade Commission (FTC) proposed a rule on January 5, 2023, that would ban noncompetes nationwide. There are serious questions about the FTC’s authority to promulgate such a rule and many practical reasons why such a sweeping approach is unwarranted—in particular at the federal level. The period for submitting formal comments to the proposed rule lasts 60 days following publication of the proposed rule in the Federal Register. The FTC did not file the proposed rule with the Federal Register until January 18, 2023, and it will not be published until January 19, 2023, meaning that the comment period will end on March 20, 2023—not March 10, 2023, as the FTC initially announced. We are told that there will be a formal request to extend the comment period for an additional 60 days, or until May 19, 2023, and that the FTC is likely to grant the request.
Companies and industry groups that are concerned about the FTC’s legal authority and the practical effects of the proposed rule should consider submitting comments. To date, over 5,800 comments have been submitted to the FTC, mostly from individuals in favor of the proposed rule based on a quick survey of the submissions. EBG is working with several clients to prepare and submit comments, and we are open to doing so on behalf of additional clients—whether alone or with a group, and whether identified publicly or submitted confidentially.