FTC under scrutiny as Gibson Dunn Navigates Trump-Era Non-Compete Enforcement
WASHINGTON D.C. – The Federal trade Commission’s (FTC) pursuit of non-compete agreements is facing heightened legal challenges, wiht the law firm Gibson, dunn & Crutcher fielding a team of attorneys advising clients navigating the evolving regulatory landscape. The firm is actively engaged in defending companies targeted by the FTC’s aggressive enforcement of existing non-compete rules, even as the agency concurrently proposes a sweeping ban on most new non-compete clauses nationwide.
The FTC’s actions stem from a January 2023 policy statement asserting that non-compete agreements are an unfair method of competition, and a proposed rule published in January 2023 aiming to prohibit employers from entering into new non-competes with workers. This aggressive stance, initiated during the Trump management and continued under Chair Lina Khan, is now encountering important pushback, prompting businesses to seek legal counsel to understand their obligations and defend against enforcement actions. The stakes are high, possibly impacting an estimated 30 million U.S. workers currently bound by non-compete agreements, and reshaping employer-employee dynamics across numerous industries.gibson Dunn’s representation includes expertise across antitrust, competition, and labour & employment law. Key attorneys involved in this area include allyson N. ho, Eugene Scalia, and Helgi C. Walker, all based in Washington, D.C. Scalia, a former Secretary of Labor, brings significant goverment experience to the firm’s defence efforts.
On the labor and employment side, michael Holecek (Los Angeles), Andrew G.I.Kilberg (Washington, D.C.),Harris Mufson (New York),Jason C. Schwartz (washington,D.C.), and Katherine V.A. Smith (Los Angeles) are advising clients on the implications of the proposed rule and defending against existing enforcement actions.The FTC’s proposed rule is currently under review, with a final rule expected in the coming months. The agency estimates the ban could increase wages by $300 billion per year and encourage new business formation. However, business groups argue the rule will stifle innovation and hinder legitimate protections for trade secrets and confidential information. Legal challenges to any final rule are widely anticipated, setting the stage for a protracted legal battle over the future of non-compete agreements in the United States.
