Last week, the Federal Trade Commission (FTC) announced the launch of a public inquiry to examine the scope, prevalence, and impact of employer noncompete agreements. The information gathered may help guide the agency’s future enforcement actions.
A noncompete agreement is a contractual clause between an employer and an employee that restricts the employee from working for a competitor or starting a competing business after leaving their job. While such agreements may serve legitimate purposes in certain circumstances, research has shown that they are also frequently subject to misuse.
The FTC is seeking input from members of the public who have experience with noncompete agreements. This includes current and former employees who have been restricted by them, as well as employers who have faced challenges in hiring due to noncompete provisions enforced by other businesses.Â
The agency has stated that public feedback will play a critical role in helping to identify how noncompete agreements are being used in the marketplace and whether they contribute to unfair or anticompetitive practices.Â
This new inquiry follows earlier efforts by the FTC to regulate noncompete agreements. Last year, the Commission advanced a proposed rule to its final stage that would have broadly prohibited employers from:Â
- Entering into or attempting to establish a noncompete with a workerÂ
- Enforcing an existing noncompete with a workerÂ
- Informing a worker, under certain conditions, that they are bound by a noncompete agreementÂ
The proposed rule covered not only employees but also independent contractors and anyone working for an employer, whether paid or unpaid. It would have required employers to rescind existing noncompetes and notify workers that those restrictions were no longer valid. In addition, the rule would have preempted state laws that imposed less restrictive standards on noncompete agreements.Â
The current public comment period will remain open for 60 days, with submissions due no later than November 3, 2025. All public comments will be available for review on Regulations.gov.Â
Author:Â Jennifer Evancic
Jennifer.Evancic@ResourceManagement.com
Jennifer Evancic is a third-party auditor valued by creditors and large organizations for her knowledge in call monitoring within the collections industry. With meticulous attention to detail and a firm grasp of regulatory requirements, she ensures compliance with clients’ criteria and state and federal regulations.
Jennifer audits collections calls, ensuring they meet client-specific criteria and comply with regulations, providing valuable insights and maintaining industry standards.
Beyond her auditing responsibilities, Jennifer takes the lead in organizing and facilitating monthly call calibrations. These sessions serve as a collaborative forum where clients and their vendors come together to discuss call monitoring results and address any findings or areas for improvement. Jennifer’s guidance fosters open communication and ensures alignment between clients and vendors, driving continuous improvement in collections practices.
Jennifer stays up-to-date with compliance and industry best practices by participating regularly in peer meetings, regulatory updates and industry webinars. This keeps her informed about emerging issues and ensures she remains a knowledgeable leader in collections compliance.
