O’Melveny Worldwide

The Hollywood Reporter: A New Era of Noncompetes May Shake Up Hollywood Contracts

January 12, 2023


The Federal Trade Commission (FTC) released a proposed rule on January 5 that would essentially ban noncompete clauses from employment agreements across the country. The FTC’s reasoning behind the rule, which would apply to independent contractors, unpaid interns, and employees, is that noncompetes create unfair competition. “An overused term is actually appropriate here — it would be truly a sweeping sea change,” said Molly Lens, co-head of O’Melveny’s entertainment, sports and media group. “Less so for California, which already prohibits the use of post-employment noncompetes in most circumstances, but for the majority of the other states which do not. I wouldn’t be surprised if the FTC were looking at California law for guidance.”

Read the full article here.