The Federal Trade Commission (FTC) has ended the public comment period on a controversial proposed ban on noncompete clauses and could vote in 2024 on whether or not to approve the potential nationwide prohibition.

During the comment period, which concluded in late April, individuals, companies and other entities submitted insights to the FTC regarding their thoughts on the proposed ban and the impacts it could have. In all, nearly 27,000 commentaries poured in.

FTC staffers are now taking time to evaluate the comments and consider how to proceed with the proposed ban.

This could lead to anything from the FTC deciding to scrap the proposal, to regulators modifying it based on comments, to leaving the possible prohibition worded as it currently is. Analysts have said some modification is probable, though what that will be isn’t yet known.

Citing a source familiar with the matter, Bloomberg reported that the FTC is expected to vote in April 2024 on a final version of the envisioned ban on noncompetes in employment contracts. ASI Media has previously reported that a final rule wasn’t likely to be issued until late 2023 or in 2024.

Proposed Ban on Noncompete Clauses Divides the Industry https://t.co/qwbsG0IYog

— Chris Ruvo (@ChrisR_ASI) February 20, 2023

Even if the FTC adopts a final rule banning noncompetes, legal challenges are likely. A potential court-ordered injunction as the legal battle plays out could then delay implementation of the rule. The U.S. Chamber of Commerce has said the FTC doesn’t have authority to prohibit noncompetes and has vowed to sue if the agency attempts to enact a ban.

A noncompete clause essentially prohibits one party (a worker) from taking another job or starting a business in a similar profession and/or region that competes against another party (the employer).

As currently written, the FTC rule would prohibit employers from inserting noncompete clauses in contracts with essentially all workers – and from in any way representing that a worker is subject to a noncompete.

Noncompetes would still be allowed in the sales of businesses, but with limited application to individuals who owned at least 25% of the company.

The rule doesn’t ban nondisclosure clauses, but does make it clear that nondisclosures worded in a way that act as de facto noncompetes would be prohibited and unenforceable.

You knew the FTC was looking at banning #noncompete clauses. Now Congress is considering doing so too. https://t.co/WfjX2qv22I@asicentral @ASI_MBell

— Chris Ruvo (@ChrisR_ASI) March 2, 2023

The proposed ban has stoked an outpouring of strong opinions in the North American promo products industry. Some favor a ban, others oppose it.

The FTC has estimated that by halting the practice of noncompetes, wages will rise by $300 billion annually across the United States’ economy. Career opportunities would expand for about 30 million Americans, or 18% of the U.S. workforce, who are currently estimated to be covered by noncompetes, the FTC has said.

Separate from the FTC proposal, the Workforce Mobility Act of 2023 has been introduced in both the U.S. House and Senate. With limited exceptions, the bill, if made law, would prohibit individuals and businesses from entering into, enforcing or attempting to enforce a noncompete clause. The bill currently lies with committees in both Congressional chambers.