For example, the proposed rule would not cover non-compete between franchisors and franchisees. The FTC seeks comment on whether such clauses should be covered between franchisors and franchisees and, if covered, whether there should be a categorical ban on such clauses or a rebuttable presumption of unlawfulness, or whether different types of clauses should be subject to different standards or exemptions. The FTC seeks similar comments on similar considerations regarding senior executives and treating low/high-wage workers differently. Although the proposed rule has no immediate effect, employers may consider taking proactive measures to demonstrate good faith compliance should the rule go into effect or lean towards the attitudes/trends of the FTC and other agencies regarding these clauses, even if the rule were to not go into effect. These proactive measures may include prohibiting the use of noncompete clauses in contracts, using non-compete clauses in the meantime but making sure they are specific in scope and not overburdensome, and auditing current contracts. If the bank chooses to audit current contracts, it should be doing a careful review looking for non-compete clauses and de facto noncompete clauses as described previously, and get a head start on determining what action to take with the identified clauses should the rule go into effect. Prince Girn, JD, serves Compliance Alliance as Associate General Counsel. He received his bachelor’s degree in political science from the University of California, Davis and received his Juris Doctor from San Joaquin College of Law. Prince is as a member of our expert Hotline team where his knowledge in areas of lending, real estate, and credit procedures makes him an asset for our member banks. He is also a writer for the Bankers Alliance monthly magazine and other state banker publications. You may also be interested in these: Compliance Alliance Click or scan to watch a sample training At C/A, we’re known for top-tier training and education — more than 80 training segments a year. Special Audit Projects Reach us online at: info@bankersalliance.org or (833) 683-0701 Peer-to-Peer Discussions Bundled Services Outsourced Support Staff Augmentation Full CMS Oversight C M Y CM MY CY CMY K The data the FTC presents supports the notion that non-compete clauses significantly reduce earnings for workers and cause exploitation, stifle entrepreneurship and new ideas, and reduce overall economic and marketplace freedom. WE’RE YOUR PARTNER IN BANKING. 2120 South 72nd Street, Suite 1200, Omaha 402.391.6777 www.crokerlaw.com 27
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