FTC Bans Common Media Biz Contract Clause: The Noncompete




In a move that could have far-reaching effects on the media industry, the Federal Trade Commission voted yesterday (4/23) to ban noncompete clauses in employment contracts for most U.S. workers. This is certainly going to be challenged in courts as The New York Times reports. “But the U.S. Chamber ofCommerce vowed to sue the FTC to block the proposal, calling it ‘an unlawful power grab’ in a statement shortly after the vote. The chamber, as well as the two dissenting [FTC] commissioners, has argued that the FTC doesn’t have the authority to address this issue and that it should be left to the states.” The Times piece notes that the rule becomes law 120 days after being published in the Federal Register – meaning sometime in late August – but that legal challenges could block or delay the change. In the radio industry, most on-air talent, programmers, and sales staff who work under written contracts have a noncompete clause that prevents them from working “across the street” usually for six months. If this new policy stands, it will be a monumental change for radio companies. Read the Times story here.