The FTC's proposed rule banning non-compete clauses in employment contracts would have a wide reaching effect on employer-employee relationships. About 20% of American employees are currently subject to non-compete obligations. Non-compete provisions have traditionally been regulated at the state level and typically allow employees to sue employers for violations. However, only the FTC can enforce its own rules. Due to the sheer amount of workers covered by non-compete restrictions, enforcement of this proposed rule could be a heavy lift for the FTC. That said, employers may want to take this proposed rule into consideration and weigh the potential cost of FTC enforcement action when deciding whether to include non-compete provisions in their employment agreements.
