Federal Trade Commission (FTC) Proposed Rule to Ban Noncompete Clauses
NSGA staff polled its members regarding whether they wanted the organization to comment on the FTC proposal to ban non-compete clauses. A majority of respondents expressed support for the proposal.
NSGA entered a comment supporting the ban as such clauses can be anticompetitive and result in barriers for small sporting goods retailers and dealers, which make it difficult for them to be profitable and continue in business. Loopholes and workarounds have rendered many non-competes ineffective and are likely to result in expensive, prolonged legal matters with individuals bearing the cost of challenging a former employer. Furthermore, non-competes have forced qualified persons out of the sporting goods industry due to their inability to earn a living in the industry covered by a non-compete prohibition.
The protection of confidential company information, intellectual property, and franchise rights are legitimate and significant concerns for employers. Subsequently, stronger enforcement of these measures should be addressed outside of non-compete clauses.Back to Current Initiatives
The FTC public comment period closed in April 2023. It is likely to take several months for the FTC to publish a final rule.