Federal Trade Commission’s proposal to broadly ban noncompete agreements
Heather said Congress has never delegated the FTC “anything close to the authority it would need to promulgate such a competition rule.” Glennon said that, even if the FTC is determined to have the authority to regulate noncompete agreements, the federal appeals court still has the power to review any finding and can reverse the FTC’s decision.
"Interfering with business practices in general is a fraught issue. The broader the language, the greater the scope and the impact of the intervention. To avoid accusations of unfairness, FTC will keep this ‘ban’ extremely narrow and concrete," Tsukerman said. “There are certainly questions as to whether the FTC possesses the legal authority to issue a rule like this. And even if the agency does, there are also questions as to whether the proposed rule — which would impose a blanket ban on all noncompetes — is overbroad and insufficiently tethered to the specific issue that the FTC seems intent on combatting, which is primarily the use of noncompetes with low-wage workers," Goldstein said.
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