On Jan. 5, the Federal Trade Commission (FTC) issued a proposed final rule that would result in a ban of noncompete agreements, and would require employers to rescind existing noncompete agreements. The public comment period for the rule terminated on April 19, but the FTC has acted aggressively to ban noncompetes in the meantime. The FTC has filed complaints against companies that use noncompete agreements, resulting in consent orders that accomplish the rescission of hundreds of existing noncompete agreements. The U.S. Department of Labor, the National Labor Relations Board and even the courts have also taken steps to deter the use of noncompete agreements.

In March, the FTC filed an administrative complaint against Anchor Glass Container Corp. (Anchor Glass), alleging that Anchor Glass used post-employment covenants not to compete unfairly to restrict employees’ freedom to accept employment with competing businesses or otherwise to compete with the employer. The noncompete agreement at issue imposed a one-year restriction on the employee, requiring the employee to refrain from being employed by or working for any company in the United States providing the same or substantially similar sales and services as Anchor Glass. Over 300 employees were subject to this restriction. The FTC argued that Anchor Glass’s use of noncompete agreements violated Section 5 of the Federal Trade Commission Act, 15 U.S.C. Section 45.