David Woolf Discusses the FTC’s Non-Compete Ban Proposal With Bloomberg Law

In a podcast with Bloomberg Law, labor and employment partner David Woolf discussed the Federal Trade Commission (FTC) proposing a ban on non-compete clauses in employment contracts that keep workers from switching jobs.

Woolf explained that the proposed ban is “very, very broad. There are virtually no exceptions. The only new exception is a failure of business exception, but even that has a high threshold. It would prohibit not only new non-competes but take out existing non-competes.” He added that the rule would also apply to what the FTC would consider “de facto non-competes.”

Woolf commented that he believes the Biden administration is concerned about non-competes because 1) there have historically been bills related to non-competes in Congress that have gotten bipartisan support, 2) non-competes can provide benefits to the economy, and 3) a focus of this discussion is lower-wage workers being put in an unfair position.

Woolf also provided insight as to why non-competes are more prevalent in some industries. “It’s jobs where you’re pushing the envelope on the technology side or development side and you think you’ve got an advantage of an employer or the company that you can exploit…. Those are the companies or the areas where you have non-competes more because there’s more to lose if someone walked out the door,” he explained.