FTC and Noncompete Clauses in Employment Contracts
In early January, the Federal Trade Commission unveiled a proposed rule that would essentially prohibit the use of noncompete clauses in employment agreements. The proposed rule is not yet in effect, as it still must undergo public comment and review. If enacted, the virtual ban of this contracted provision could reshape the employment law landscape, including that of the healthcare industry.
A copy of the FTC's proposed rule and link to submit comment can be found HERE.
The proposed ban, as currently written, does not prohibit use the use of non-solicitation or confidentiality provisions.
Some states, such as California and Massachusetts, already have a ban against the use of noncompete clauses. Other states, such as Connecticut, have limited the use of noncompete clauses. Under
Connecticut General Statute Section 20-14p, noncompete clauses cannot continue for more than one year and contain a restriction of more than 15 miles from where the physician practices. These restrictions only apply if the physician's employment is terminated "for cause".
Should you be inclined to write the FTC, your comments must be remitted by the
March 20 deadline.
