An overbroad noncompete agreement could be unenforceable

: Two years ago, I started a new job at an engineering and design firm as an entry level engineer. On my second day of on-boarding, I signed a bunch of documents, including a “Noncompete Agreement” which forbids me from working for any competing business in Michigan for two years after I leave the company. I started looking for a new job after some recent decisions by management, but pretty much any firm I interview with could be viewed as “competing.” Didn’t the Federal Trade Commission just rule that noncompete agreements are illegal?

A: On January 5, the Federal Trade Commission proposed a rule that would ban noncompete clauses as a form of unfair competition, but it’s a long way from becoming a law. The federal rulemaking process is slow, often taking as long as three years for a rule to move from suggestion to enactment.

In an opinion piece in the New York Times, current FTC chair Lina Khan argued that noncompete clauses strike at the heart of America’s values, denying workers freedom. “You’re not really free if you don’t have the right to switch jobs or choose what to do with your labor,” she wrote.

The proposed rule is, in part, a reaction to increased use of noncompete clauses. A 2019 study estimated that as many as 60 million private-sector workers are subject to noncompete agreements. An earlier study, from

2014, found almost 20% of the U.S. workforce is covered by noncompete agreements — everyone from high-paid executives to fast food workers.

A Michigan firm recently became the posterchild for noncompete abuse. Prudential Security was the subject of an FTC