Non-Compete Clause Rule

Forms and Documents

Forms and supporting documents for this ICR

Document	Type	Status	Availability
Non-Compete Final Rule_PRA Supporting Statement-2024-FINAL.pdf	Supporting Statement A	Uploaded 2024-05-07	Repair queued

IC Document Collections

Information collection document groups

IC ID	Collection	Type	Status	Form
267451	Notice of Rescission of Non-Compete Clause (Electronic Notice)		New
253298	Notice of Rescission of Non-Compete Clause (Mailed Notice)		Modified

ICR Details

OMB Control No: 3084-0173	ICR Reference No: 202405-3084-001
Status: Historical Active	Previous ICR Reference No: 202205-3084-002
Agency/Subagency: FTC	Agency Tracking No:
Title: Non-Compete Clause Rule
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Approved without change	Conclusion Date: 06/25/2024
Retrieve Notice of Action (NOA)	Date Received in OIRA: 05/07/2024
Terms of Clearance:

table that charts list comparision

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	06/30/2027	36 Months From Approved
Responses	1,132,515	0	0
Time Burden (Hours)	377,505	0	0
Cost Burden (Dollars)	3,058,267	0	0

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Abstract: The Federal Trade Commission is issuing a final rule promulgating the Non-Compete Clause Rule. The final rule provides that it is an unfair method of competition and therefore a violation of Section 5 of the FTC Act for persons to enter into non-compete clauses (“non-competes”) with workers on or after the final rule’s effective date. With respect to existing non-competes—i.e., the non-competes entered into before the effective date—the final rule adopts a different approach for senior executives than for other workers. For senior executives, existing non-competes can remain in force, while existing non-competes with other workers are not enforceable after the effective date.

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Authorizing Statute(s): US Code: 15 USC 41-58 Name of Law: Federal Trade Commission Act
  

Citations for New Statutory Requirements: None

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
3084-AB74	Final or interim final rulemaking	89 FR 38342	05/07/2024

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

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Number of Information Collection (IC) in this ICR: 2

table that charts list of burden

IC Title	Form No.	Form Name
Notice of Rescission of Non-Compete Clause (Electronic Notice)
Notice of Rescission of Non-Compete Clause (Mailed Notice)

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ICR Summary of Burden

table that charts list of burden

	Total Approved	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	1,132,515	0	0	1,132,515	0	0
Annual Time Burden (Hours)	377,505	0	0	377,505	0	0
Annual Cost Burden (Dollars)	3,058,267	0	0	3,058,267	0	0

Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Changing Regulations

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: This is a new information collection that is a program change. A non-compete clause—also commonly known as a non-compete agreement or covenant not to compete—is a term or condition of employment that prohibits a worker from, penalizes a worker for, or functions to prevent a worker from (1) seeking or accepting work in the United States with a different person where such work would begin after the conclusion of the employment that includes the term or condition or (2) operating a business in the United States after the conclusion of the employment that includes the term or condition. The Commission finds that these practices are unfair methods of competition in several independent respects related to both their facial unfairness and tendency to negatively affect competitive conditions in labor markets and markets for products and services. Because Section 5 declares unfair methods of competition to be unlawful, the Rule effectively prohibits these practices. The one-time disclosure requirement that the Commission believes constitutes a collection of information is found at 16 C.F.R. § 910.2(b)(1). Under this provision, an employer is required to provide notice to any worker other than a senior executive that the worker’s non-compete clause will not be, and cannot legally be, enforced against the worker. Since the employer will not be allowed to have non-compete clauses thereafter, there would not be a need to send the notice again. The Commission is including this notice requirement because it believes that many workers are not aware of the applicable law governing non-compete clauses or their rights under those laws.

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Annual Cost to Federal Government:

Does this IC contain surveys, censuses, or employ statistical methods? No

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency's privacy program when making this determination.     No

Does this ICR include a form that requires a Privacy Act Statement (see 5 U.S.C. §552a(e)(3))? Please consult with your agency's privacy program when making this determination.     No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? No

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Common Form ICR:  No

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On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(i) Why the information is being collected;

(ii) Use of information;

(iii) Burden estimate;

(iv) Nature of response (voluntary, required for a benefit, or mandatory);

(v) Nature and extent of confidentiality; and

(vi) Need to display currently valid OMB control number;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.

Certification Date: 05/07/2024

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