Date: February 7, 2023
Time: 4:00- 5:00pm ET
Format: Zoom Webinar
Registration Link: Register Here!
Speakers:
Brian Savage, VP and General Counsel, US Antitrust and Commercial Litigation, Teva Pharmaceuticals
George Washington, Head of Litigation for the Americas, Orange
Richard Coel, Senior Counsel, Washington Metropolitan Area Transit Authority
Roya Vasseghi, Founding Partner, Vasseghi Budd PLLC
Michelle Kallen, Partner, Jenner & Block
David Shaw, Partner, Morrison Foerster
Introduction: Canby B. Wood – Global Director of Litigation Solutions, LexFusion; & Co-Founder, Ad Idem Network
Description: The U.S. Federal Trade Commission (FTC) recently proposed a new rule that would ban employers from imposing noncompete restrictions on their workers. The FTC argues that noncompetes are “a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses”, and that by stopping this practice, it will increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans. See, FTC Proposes Rule to Ban Noncompete Clauses, Which Hurt Workers and Harm Competition.
This proposed rule comes on the heels of some federal and state lawmakers and regulators seeking to limit the use of non-competition and other restrictions on employee mobility. For example, the Department of Justice (DOJ)’s Antitrust Division has made a priority to prosecute no-poach and stand alone non-solicitation agreements between businesses, and some lawmakers have proposed the Freedom to Compete Act, which seeks to ban most non-compete agreements for low wage earners. California’s Attorney General issued an alert about its own state’s prohibition of noncompetes just last March:
“Despite being prohibited in California, noncompete provisions are routinely included in employee contracts, including contracts for lower-wage workers. This can have a tremendous effect of deterring workers from pursuing new, and oftentimes better job opportunities,” said Attorney General Bonta. “As our economy recovers, it is more important than ever for employers and workers in our state to have a system that protects competition in the labor market. Today’s alert is a reminder that noncompete agreements have no place in California.”
California law prohibits employers, including those who operate out of state but employ California residents, from enforcing noncompete agreements. Even when invalid, these agreements can discourage workers from seeking new opportunities, causing workers in a variety of professions to mistakenly believe that they cannot pursue or accept a competitor’s offer of better pay or working conditions in fear of facing legal repercussions. See, Attorney General Bonta Reminds Employers and Workers That Noncompete Agreements Are Not Enforceable Under California Law.
While some other states have prohibitions or limitations on noncompete agreements (Massachusetts, Washington, Illinois, Colorado and D.C.), the proposed FTC rule would potentially preempt all state laws *if* given full force and effect. As argued by a recent op-ed in the Wall Street Journal, the proposed rule faces significant headwinds.
Join us for a very timely discussion with leading antitrust, employment law and appellate law experts who will speak to the pros and cons of this proposed rule, its intricacies, and the political pressure it will surely face.