A Brief Note on the FTC Noncompete Rule - by Casey Muratori

Recently, tech people have been posting about the FTC’s new rule banning noncompete agreements. I will leave commentary on the substance of the rule to others, because I like to keep the posts here politically neutral 1 . But I did want to talk briefly about the procedure of agency rulemaking, since I don’t think most programmers (even in the United States) are familiar with the lifecycle of a federal agency rule.

When an impactful rule like this one is announced, and gets an effective date, it’s actually in the middle of its road to adoption, not the end. It has gone through a notice and comment process, where the public is able to provide feedback on the rule to which the agency must respond. But at this point, the rule has not gone through judicial review, which means its future is still highly uncertain.

I have seen many people dismissing concerns that the rule will be overturned when challenged in court. They typically say something like, “Congress gave the FTC the authority to pass this rule,” and leave it at that. But such a blanket statement fails to capture the reality of the process that will actually occur.

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