On March 20, the U.S. Small Business Administration (SBA) Office of Advocacy submitted a comment letter on the Federal Trade Commission’s (FTC’s) notice of proposed rulemaking on the Non-Compete Clause Rule.
Proposed by the FTC on Jan. 19, the Non-Compete Clause Rule would make it an unfair method of competition for an employer to: enter or attempt to enter into a non-compete clause; maintain a non-compete clause; or, under certain circumstances, represent to a worker that they are subject to a non-compete clause. The proposed rule will require employers to rescind current non-compete clauses, but will not apply to franchisees.
Based on their analysis and data, SBA’s Office of Advocacy encouraged the FTC to: adopt an approach that addresses the different concerns of small businesses in the marketplace; estimate the full impacts of changes to non-compete clauses; and consider and analyze alternative approaches for small entities to minimize adverse impacts while achieving agency objectives.
At the urgency of the small-business community, the FTC extended the comment period through April 19. NSBA encourages all affected parties to consider and comment.
Read more from SBA’s Office of Advocacy, and follow NSBA for developments on the FTC’s efforts to reshape Non-Compete Clauses in the U.S.