The Federal Trade Commission is considering whether to put restrictions on noncompete clauses.
Those are the clauses "that limit the ability of an employee to join or start a competing firm after a job separation," as the FTC explains.
The clauses are fairly standard in on-air talent and other media contracts given the investment TV stations and networks make in cultivating that talent.
The commission has scheduled a Jan. 9 workshop on "whether there is a sufficient legal basis and empirical economic support to promulgate a Commission Rule that would restrict the use of non-compete clauses in employer-employee employment contracts."
Among the topics for discussion, according to the FTC, are:
- "What impact do non-compete clauses have on labor market participants?
- "What are the business justifications for non-compete clauses?
- "Is state law insufficient to address harms associated with non-compete clauses?
- "Do employers enforce non-compete agreements contained in standard employment contracts? How routine is such enforcement?
- "Are there situations in which non-compete clauses constitute an unfair method of competition (UMC) or an unfair or deceptive act or practice (UDAP)? How prevalent are these situations?
- "Should the FTC consider using its rulemaking authority to address the potential harms of non-compete clauses, applying either UMC or UDAP principles? What “gap” in existing state or federal law or regulation might such a rule fill? What should be the scope and terms of such a rule? What is the statutory authority for the Commission to promulgate a rule?
- "Should the FTC consider using other tools besides rulemaking to address the potential harms of non-compete clauses, such as law enforcement, advocacy, or consumer/industry guidance?
- "What additional economic research should be undertaken to evaluate the net effect of non-compete agreements? Should additional economic research on the empirical effects of non-compete agreements focus on a subset of the employee population? If so, which subset?"
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