100 Trade Secret Lawyers Can’t Be Wrong

The time to submit comments in response to the FTC’s proposed rule to ban on noncompetes expired yesterday.

The FTC received a total of 26,813 submissions, about 700 of which seem to have been submitted in just the last two hours before the deadline. So far, 15,790 of the comments have been processed and posted and are available publicly.

As previously mentioned, Erika Hahn and I planned to file a submission.

We did — along with 100 other lawyers.

Our submission is based on the collective experience of over 100 lawyers from around the country — from California to Massachusetts to Florida, including Alabama, Arizona, Georgia, Illinois, Indiana, Kansas, Michigan, Nevada, New York, New Jersey, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas, Washington, Washington, D.C., and Wisconsin — each of whom practices extensively in the area of trade secrets and restrictive covenants.

My preliminary draft was over 90 pages (without the signature pages, attachments, or additional arguments I later added and some others suggested). The final submission is 72 pages (plus attachments).

The submission explains lingering confusion about the use, enforcement, and impact of noncompete agreements; provides information in response to the FTC’s specific questions; and identifies elements of possible guidance or a rule that would achieve most of the Commission’s objectives, while balancing the competing interests at play (i.e., those of companies, workers, states, and the United States economy) and avoiding both significant unintended consequences that are likely to flow from the currently proposed rule and an over-reliance on academic literature, which has recently been called into doubt by (among others) the very author of much of the research.

As with prior submissions (see July 14, 2021 in response to the President’s Executive Order, March 11, 2020 following the FTC’s first workshop on noncompetes, December 20, 2021 to the DOJ and FTC), all of the signatories again spoke with one voice.

We see the issues from all three perspectives: employee, former employer, and new employer. And despite the broad range of clients we help, our respective locations around the country, and the local, regional, or national scope of our respective practices, we were all in agreement about what to say in our submission. It can be summarized as follows: Federal regulation is likely inappropriate, is definitely premature, and, in any event, should be limited.

Enjoy the read.

We’ll keep you posted as things develop.