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FTC Seeks Ban on Non-Competes

January 12, 2023

On January 5, 2023, the Federal Trade Commission (FTC) proposed a rule that is essentially a blanket ban on non-competes per Section 5 of the FTC Act which prohibits unfair competition. If implemented, the new rule would not only restrict employers from utilizing non-competes within their workforces but would further require previously entered non-competes to be rescinded by individual notice to affected employees and former employees.

Under the rule, an employer would be prohibited from preventing a “worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.”

Although wide-reaching, there is a silver lining. The proposed rule does not affect non-disclosure agreements or non-solicitation agreements, except where such a clause is “written so broadly that it effectively precludes the worker from working in the same field after the conclusion of the worker’s employment with the employer.”

The proposed rule contains a “sale of a business” exception limited to an owner, member or partner holding at least 25% ownership interest in a business entity.

If adopted, the proposed rule would apply to both employees and independent contractors and would supersede Florida Statute, Section 542.335, which permits employers to utilize non-competes as a means to protect its legitimate business interests.

The proposed rule follows an executive order signed by President Biden in July 2021 addressing competition in the labor market, in part by urging the Federal Trade Commission (FTC) to research restrictions on non-compete agreements.

The FTC says that the rule will take effect 180 days after the final version is published, but legal challenges are likely to delay implementation of the rule. The comment period is open now through March 10, 2023. Affected employers and employees are able to provide comments to the FTC about the proposed rule.

Studies show that approximately 30 million workers would be affected by this rule, and most U.S. employers would also be affected. Non-competes are generally used to protect the investment that employers make in their businesses and employees.

We will continue to monitor the situation for new developments, including legal challenges over the FTC’s authority to issue such a broad sweeping ban on non-competes in the United States. If you are concerned about how this new rule could impact your business, please reach out to Melody Lynch or Rachel Gebaide to discuss how our employment law team can best address these issues for your business. 

This article is informational only. You should consult an attorney before acting or failing to act. The law may change rapidly and no warranty is given. LOWNDES DISCLAIMS ALL IMPLIED WARRANTIES AND WITHOUT LIMITATION, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. ALL ARTICLES ARE PROVIDED AS IS AND WITH ALL FAULTS. Consult a Lowndes attorney if you wish to establish an attorney/client relationship.

Rachel D. Gebaide is a member of the firm’s Executive Committee and chair of the Labor and Employment Law Group. She is an experienced employment litigator and adviser, counseling companies in the management of their human resources issues.

Rachel regularly represents employers in federal and state courts and before administrative agencies in defending against claims involving allegations of employment discrimination and violations of the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), the Uniformed Services Employment and Reemployment Rights Act (USERRA), and other employment laws. She also defends discrimination claims arising under the Fair Housing Act.  

In addition to her litigation practice, Rachel drafts and reviews employee handbooks, employment agreements, non-competition agreements, separation agreements, and other personnel documents. She regularly advises clients regarding workplace issues and compliance with the FMLA, FLSA, WARN Act, the Affordable Care Act, and other employment laws. Rachel also has extensive experience in conducting independent investigations. 

A frequent speaker, Rachel often writes articles on developing issues in labor and employment law for client-focused publications, legal industry news outlets, and the firm’s employment law blog

Rachel is a member of the Labor and Employment Law Sections of the American Bar Association and the Federal Bar Association. She is also a member of the Orange County Bar Association, having served as Chair of the Labor and Employment Law Committee. Rachel is active in the Litigation and Employment Law Group of Meritas, a global alliance of independent law firms. 

She also serves as Executive Vice President of Congregation Ohev Shalom and Vice President, Legal of TOP Jewish Foundation. 


Melody Lynch focuses her practice on probate, trust & fiduciary litigation, contested guardianships, and complex business disputes. Her MBA complements her law degree when she analyzes financial statements and handles other complicated issues involving assets. 

A significant portion of Melody’s practice is devoted to resolving conflicts among family members and other estate beneficiaries, fights over missing assets and property ownership, claims by or against fiduciaries, guardianship challenges, and other proceedings requiring the interpretation of wills and trusts. She frequently helps charitable organizations, foundations, trustees and other institutional beneficiaries of large estates navigate the probate process. Whether in or out of the courtroom, Melody handles these delicate – and often emotional – issues not just with legal proficiency but with compassion as well.  

Melody’s experience extends to other business disputes too, particularly in the employment law arena with matters involving restrictive covenants as well as non-compete and non-disclosure agreements. She has protected employers in a wide range of industries, including medical devices, pest control, physicians and physician practices. 

In addition, she is a Guardian ad Litem for the Legal Aid Society where she represents the interests of abused and neglected children. She also is a pro bono attorney for Seniors First where she represents the interests of indigent elderly wards. 

The court room isn’t the only stage on which Melody has appeared. Before pursuing her career in law, Melody attended college on a ballet scholarship and was an apprentice dancer with a professional ballet company. A native of Orlando, her passion for both the arts and the area informs her leadership roles in the Central Florida community. She serves as president-elect of the Orlando Philharmonic Orchestra, was named to the prestigious Orlando Business Journal’s "40 under 40" list, and was awarded the Presidential Leadership Award by the Orange County Bar Association. 

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