Legal Insider: FTC considers banning non-compete agreements

This is a sponsored column by attorneys John Berry and Kimberly Berry of Berry & Berry, PLLC, an employment and labor law firm located in Northern Virginia that specializes in federal employee, security clearance, retirement and private sector employee matters.

By John V. Berry, Esq.

In a move that will affect Virginia executives and employees, it appears that the Federal Trade Commission (FTC) is considering new regulations to curtail the use of non-compete agreements. Non-compete agreements limit the ability of employees to work for potential competitors or start their own businesses.

The President issued an Executive Order in July 2021 urging the FTC to consider limiting the unfair use of non-compete agreements that unfairly limit worker mobility. It now appears that the FTC is on the verge of taking action.

Non-compete agreements in recent years have gotten out of hand, with some companies barring even fast food workers or coffee baristas from taking similar positions elsewhere. Traditionally, non-compete agreements were reserved for very senior-level executives, but the practice has now been extended to all types of employees.

Lina Khan, the Chairperson of the FTC, recently told the Wall Street Journal, “We feel an enormous amount of urgency given how much harm is happening against the workers. This is the type of practice that falls squarely in our wheelhouse.” While non-compete agreements have typically been controlled by state law, it is time for action on the federal level. Locally, in 2020, Virginia exempted low-wage workers from non-compete agreements; this was a move in the right direction.

Many lawyers who draft non-compete agreements disagree with the FTC taking any action to limit them. Our firm represents executives and employees who have been issued unfairly broad non-compete agreements, and we believe that the FTC should take action to limit this practice.

Contact Us

If you are employed in Virginia and have signed or are considering signing a non-compete agreement, you should seek the advice of a qualified Virginia employment lawyer. Please contact our office at 703-668-0070 or through our contact page to schedule a consultation.