FTC to hold noncompete agreement workshop about enforcement actions

The Federal Trade Commission (FTC) will host a workshop focused on protecting workers from anticompetitive noncompete agreements next month, after dropping a noncompete rule earlier this month. 

In a 3-1 vote, the FTC dismissed its Circuit Court appeals for the noncompete clause rule finalized last year, ultimately killing the Biden Administration rule. 

Yet, several days later, the FTC sent several large healthcare employers and staffing firms letters urging them to conduct a comprehensive review of their employment agreements, including any noncompetes or other restrictive agreements, to ensure they are appropriately tailored and comply with the law. 

“Many healthcare employers and staffing companies may include unreasonable noncompete agreements in employment contracts for vital roles like nurses, physicians, and other medical professionals,” an FTC press release on the letters says. “These restrictions can unreasonably limit healthcare professionals’ employment options and thereby limit patients’ choices over who provides their medical care — including, critically, in rural areas where medical services are already stretched thin, the letters state.”

The FTC has authority under Section 5 of the FTC Act to investigate unfair methods of competition, including noncompete agreements that are unjustified, overbroad, or otherwise unfair or anticompetitive, the release says. 

A day before the FTC vacated the noncompete clause, it launched a public inquiry aimed at better understanding the scope, prevalence, and effects of employer noncompete agreements, as well as to gather information to inform future enforcement actions. 

The public can submit comments at Regulations.gov until Nov. 3. 

The Oct. 8 workshop will be held in person and livestreamed from 2 p.m. to 6 p.m. It will be open to the public.

“A noncompete agreement is a contractual term between an employer and a worker that typically blocks the worker from taking a job with a competing employer or starting a competing business after the end of the worker’s employment,” a release on the event says. “In practice, noncompete agreements are often subject to abuse.”

It states the workshop is part of the Trump-Vance FTC’s efforts to highlight the negative impact of noncompete agreements on American workers and put businesses on notice of its enforcement priorities. 

Public statements will be made by FTC commissioners, victims of noncompete agreements, and leading experts in the field, the release said. 

A webpage for the event says anyone attending in person should arrive 15 minutes early to allow for security, and a valid ID is required to proceed through security. 

It says the webpage will be updated with information on how to attend the livestream on the morning of the event.

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