The FTC on January 5 issued a stunning proposed rule that wipes out all employment noncomps for all employees and consultants, including those that comply with State laws and those that are currently in existence.

The theory is that non-comps are unfair competition.  Can the FTC do this?  Some observers think not but if the FTC in fact adopts its proposal, we will find out in court.

There are exceptions but precious few: franchisee noncomps are excluded, of course NDAs for trade secrets and technology are excluded, and employee non-solicitation agreements would survive.  And if you have a noncomp in connection with sale of a business in which you own at least 25%, your non-comp will be enforced (theory there: you are an owner selling good will and if you compete you impair that good will).  The cancellation of non-comps would apply to all workers, including senior executives in the C-suite.

This proposed rule will grab lots of headlines in the near term.  It is just not clear that the FTC has rule-making authority here, and further the business lobbies (and Republicans) will no doubt howl and with reason; this feels more like social policy engineering and less like regulating business competition.  Stay tuned.