Earlier this month, I wrote a post about President Biden’s executive order directing the Federal Trade Commission (FTC) to take action to curtail the abuse of non-competes and other employment agreements that could limit employee mobility. In response to that executive order, nearly sixty lawyers (including yours truly) joined in a letter asking the FTC to exercise care in deciding whether to assert jurisdiction in this area. That letter, drafted by Russell Beck, lays out multiple grounds for concern about the FTC asserting itself in an area traditionally addressed by state legislatures.
Russell’s letter addresses a wide range of topics and I would commend those with interest in this area to read it. It provides a thorough consideration of the reasons for the need for non-competes in certain situations and also addresses common misconceptions about their use. The letter also notes a key development that is already taking place — that many states are actively taking steps to address the issues giving rise to the perceived need for federal intervention. Most notably, the use of non-competes against low wage workers — arguably the biggest driver behind the push to curtail or ban non-competes — has been recently addressed by ten states including Illinois, Maine, Maryland, Massachusetts, Nevada, New Hampshire, Oregon, Rhode Island, Virginia and Washington.
We’ll see what actions the FTC decides to take and I will continue to blog about any future developments.