Published on Jan. 9, 2024

Updated on Jan. 31, 2024

A new FTC proposal could fundamentally alter the contracting landscape by banning non-compete agreements. However, this change could lead to massive unintended consequences.

By: Savanah Seyer*

I.              Introduction

            In Merriam-Webster’s dictionary, the term “burying the lede” is defined as “hiding the most important and relevant pieces of a story within other distracting information.”^[1]  The perfect example of this concept is the Federal Trade Commission’s “Proposed Non-Compete Ban”.^[2]  On January 5, 2023, the Federal Trade Commission (“FTC”) proposed a rule banning nearly all non-compete agreements in employment contracts.^[3]  This was the first proposed rule the FTC announced since a November 2022 policy statement in which the FTC announced it would be expanding its scope of enforcement power by relying on Section 5 of the FTC Act.^[4]  Buried within the language of the proposed rule, the FTC has implied that any contractual term in a standard form contract executed by parties of unequal bargaining power could be held to be exploitative and unenforceable,^[5] suggesting that a myriad of contractual terms and standard form contracts as a whole could be on the FTC’s chopping block.

            Part II of this paper will discuss the legal background of Section 5 of the FTC Act and the Commission’s attempts to expand its authority under the Act. It will also describe standard form contracts and the contracting rules that police their use.  Part III will discuss the recent policy developments and the FTC’s proposed non-compete ban.  Finally, Part IV will examine the implications of the Commission’s proposed rule and where American contract law could find itself should the FTC’s logic prevail.

II.              Legal Background

A.    FTC Act

            In 1914, Congress passed the FTC Act and formed the FTC to promote fair competition.^[6]  Section 5 of the FTC Act is the primary source of the Commission’s authority.^[7]  Congress expanded the FTC’s authority in 1938 by passing the Wheeler-Lea Act to add to the FTC Act by prohibiting “unfair or deceptive acts or practices.”^[8]  Section 5 holds that “unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.”^[9]  Section 5 also empowers the FTC to “prevent” said “unfair methods of competition” (“UMC”) and “unfair or deceptive acts and practices.”^[10]  Courts have granted the FTC broad powers, allowing it to make rules and bring actions to enforce “unfair methods of competition” and “unfair or deceptive acts or practices” even if those practices do not necessarily fall under the scope of the antitrust laws (i.e. the Sherman, Clayton, and Robinson-Patman Acts).^[11]

            While many FTC investigations end with consent agreements by private parties that they will cease their offending conduct, the FTC has two options when initiating litigation over a violation of Section 5 of the FTC Act.^[12]  First, the FTC may bring an administrative complaint.^[13]  Proceedings would take place in front of an administrative judge and decisions may be appealed directly to the FTC itself.^[14]  The FTC’s final determinations can be appealed to the U.S. Court of Appeals and then to the U.S. Supreme Court.^[15]  Second, the FTC may bring action in federal court for “injunction, civil penalties, or consumer redress” against an offending party.^[16]

            There is an ongoing dispute about the scope of the FTC’s rulemaking authority.^[17]  The FTC argues Section 6(g) of the FTC Act, which states that the Commission has the power to “make rules and regulations for the purpose of carrying out the provisions of this subchapter,” grants it the authority to make rules regarding “unfair methods of competition.”^[18]  However, the FTC’s rulemaking authority is bound by “special procedures” set by Congress in Section 18 of the FTC Act.^[19]  

            A sizable number of commentators have employed several theories to demonstrate the Commission’s lack of UMC rulemaking power.^[20]  For example, some opponents of the FTC’s theory of authority have argued that the Commission’s rulemaking regarding unfair methods of competition would run afoul of the major questions doctrine.^[21]  The major questions doctrine refers to the number of opinions in which the Supreme Court has stated that for a government agency to exercise rulemaking authority about an “issue of vast economic and political significance,” it must do so with “clear congressional authorization.”^[22]    

B.    Non-Compete Agreements

            In the past, the FTC was primarily concerned with certain types of “non-competitive” behavior that explicitly violated antitrust laws, or behavior resulting in “incipient” violations that may become explicit if allowed to continue.^[23]  Additionally, the FTC took action against conduct that was considered to violate the “spirit of the antitrust laws.”^[24]  Such conduct included practices that are not explicitly included in the antitrust laws, but cause “potential harm” like that of a traditional antitrust violation.^[25] A certain business practice that, before 2023, the FTC never sued to enjoin was employment non-compete agreements.^[26]  

            Employee non-compete agreements are generally defined as “any agreement, ancillary to an employment contract, whereby the employee agrees not to participate in certain competitive activities, usually for a specified period of time after termination of employment.”^[27]  Many courts have determined enforceability of non-compete clauses on a case-by-case basis, and several states have created their own rules governing enforceability.^[28]  The Supreme Court of Ohio, for example, held that non-compete agreements imposing “unreasonable restrictions” upon an employee are enforceable only to the “[e]xtent necessary to protect the employer’s legitimate interests.”^[29]  The court balanced the employer’s requirement of protection with the “undue hardship” upon the worker and injury to the public.^[30]

            Litigated cases concerning non-compete clauses between parties buying and/or selling  businesses have largely been found reasonable and enforceable by courts because businesses have a higher level of sophistication in contract negotiations.  As such, fairness concerns for employees in these transactions are inapplicable.^[31]

C.    Standard Form Contracts and Contracts of Adhesion

            Standard form contracts contain boilerplate language that is pre-written and administered on a non-customized basis.^[32]  Standard form contracts are often mentioned in the same breath as “contracts of adhesion”, but the two types of contracts are not necessarily the same.^[33]  Contracts of adhesion are standard form contracts presented by one party to another on a “take-it-or-leave-it basis.”^[34]  In other words, no negotiation is possible regarding contract terms.^[35]  In most jurisdictions, standard form contracts and contracts of adhesion are not automatically considered unfair or unenforceable.^[36]  When presented with an adhesion contract, courts determine whether the contracts are “demonstrably unfair” or “unconscionable” to a certain party.^[37]  Under the theory of contra proferentem, the contracts are usually construed against the drafting party.^[38]  Contract terms can also be held unenforceable if the terms do not adhere to the “reasonable expectations of the weaker or ‘adhering’ party.”^[39]  For most courts, finding that a standard form contract is “adhesive in character” is the “beginning and not the end of the analysis insofar as the enforceability of its terms is concerned.”^[40]

            Opinions on the utility or fairness of boilerplate language and standard form contracts differ.^[41]  Many scholars and legal experts (including the FTC) suggest that standard form contracts are often used to exploit consumers and employees, which are usually the parties with “weaker” bargaining power.^[42]  However, many courts and other legal scholars have noted that standard form contracts allow for efficiency, consistency, convenience, and clarity in the contracting relationships and in how contracts are analyzed by courts.^[43]

D.    FTC Section 5 Policy Statement

            In November of 2022, the FTC released a policy statement regarding the phrase “unfair method of competition” as defined by the FTC,^[44] replacing its prior statementenacted in 2015.^[45]  The 2015 statement focused the Commission’s UMC enforcement analysis on “the public policy underlying the antitrust laws, namely, the promotion of consumer welfare.”^[46]  The 2022 statement, in contrast, focuses on cracking down on methods of competition that “negatively affect competitive conditions.”^[47] The statement suggests that the Commission would be policing unfair methods of competition on an even broader scale than it had previously.^[48]  Relying on the legislative history of the FTC Act and courts’ broad interpretation of Section 5, the FTC stated that it had the authority to define what an “unfair method of competition” was and that its’ enforcement authority extended to any practice that fell under the Commission’s new definition.^[49]  According to the new policy statement, there are two elements of an “unfair method of competition.”^[50]  The elements are (1) “The conduct must be a method of competition”, (2) “That is unfair.”^[51] If one principle is highly satisfied by the conduct at issue, less evidence of the second criterion is required.^[52]

            First, “the conduct must be a method of competition” means “conduct undertaken by an actor in the marketplace” not simply a “condition of the marketplace” which was not due to the actions of a respondent.^[53]  Further, the relationship between the action and competition in the marketplace may be indirect, as long as the actions “implicate competition.”^[54]  

            The second element, unfairness, is satisfied when the action at issue “goes beyond competition on the merits.”^[55]  To determine whether a party’s conduct “goes beyond competition on the merits,” the FTC identifies two main criteria that must be satisfied.  The first is that conduct is “coercive, exploitative, collusive, abusive, deceptive, predatory, or involve[s] the use of economic power of a similar nature … [or] otherwise [is] restrictive or exclusionary, depending on the circumstances.”^[56]  The second criterion is that the practice “tends to foreclose or impair the opportunities of market participants, reduce competition between rivals, limit choice, or otherwise harm consumers.”^[57]

III.              Recent Developments

            On January 5, 2023, the FTC proposed a near-total ban on non-compete clauses and a rescission of any existing non-compete clauses.^[58]  The FTC defined a non-compete clause as a contractual term between an employer and employee that “blocks the worker from working for a competing employer, or starting a competing business, within a certain geographic area and period of time after the worker’s employment ends.”^[59]

            The FTC distinguishes non-compete clauses between employers and employees and those made between buyers and sellers of businesses.  The policy statement notes that it “may be appropriate” to hold non-compete agreements between buyers and sellers of businesses as exempt from the outright ban, but only if the restricted party is “a substantial owner of, or substantial member or substantial partner in, the business entity” at the time of the agreement being entered into.^[60]  A “substantial owner/member/partner” is one that holds 25% or more of the interest in an entity.^[61]  Rather than use the rule of reason, the Commission suggests either an outright ban on non-compete agreements or a “rebuttable presumption” test (where the non-compete clause would be considered illegal unless the employer could show that the clause was reasonable and created for a legitimate and accepted business purpose).^[62]

            Furthermore, the FTC mentions that other contract clauses could be anticompetitive as well and considered “de facto-noncompete clause[s].”^[63]  “Non-disclosure agreements, non-solicitation agreements, no-business agreements, no-recruit agreements, liquidated damages provisions, and training-repayment agreements” were all mentioned as business practices that could potentially be considered outright illegal under the FTC’s new policy.^[64]  

A.    Justifications for the Rule

            The FTC states non-compete agreements had a depressing effect on employee wages and that non-compete clauses could harm entrepreneurship and potential job creation.^[65]  As such, the Commission asserts in its statement that non-compete clauses have negative effects on product and service markets by inhibiting the free movement of labor, which can drive up prices due to the aforementioned depressing effect on entrepreneurship.^[66] The FTC also highlights that non-compete clauses potentially exacerbate and increase wage gaps between different races and genders.^[67]  

            The Commission acknowledges that there were some potential benefits to enforceable non-compete clauses, such as increased investment in “worker training” and “capital assets”.^[68] It also notes that non-compete clauses create an avenue for businesses to prevent their trade secrets from being disclosed when employees leave the firm.^[69]  However, the Commission used a monetary balancing test and found that, by its standards, the “benefits” of non-compete clauses were outweighed by the harms caused to competition.^[70]

B.    Imbalance of Bargaining Power

            The FTC contends that the “imbalance of power” between employees and employers make non-compete agreements “exploitative and coercive” because the employee has less bargaining power.^[71]  Expounding on this point, the FTC describes the factors that could lead to unequal bargaining power between employees and their employers, such as union membership (or lack thereof), outsourcing, no-poaching agreements, and lack of negotiating experience.^[72]

            Notably, the FTC highlights “cognitive biases” exhibited by certain groups of people when reading and agreeing to contracts.^[73] For example, the FTC states that consumers often focus on price and amount in a transaction and ignore other aspects of a contract.^[74]  The FTC suggests that employees may act the same way when entering into contracts with their employers, and consequently, employers may take advantage of that ignorance.^[75]  

IV.              Discussion

            The implications of the FTC’s proposed rule go further than banning non-compete clauses. The proposed rule is based on language that would enable the FTC to alter contract law in the United States and grasp an unprecedented amount of economic power. 

            The Commission chose to directly analogize non-compete clauses to consumers reading a “standard-form” contract in a sale context.^[76]  With this language, the FTC implies that “unequal bargaining power” and terms offered on a standard form basis could be enough to find that a contractual term (such as a non-compete clause) is “exploitative” and “anticompetitive” in all contexts, not merely employment agreements. ^[77] The FTC’s reasoning would ultimately lead to the conclusion that all contracting relationships would need to be equal in terms of negotiation power – something that is near, if not totally, impossible.  

            Unequal bargaining power is a reality in almost all employment and consumer relationships, and courts have held that just because two parties have unequal bargaining power, or a party has not read the full text of the contract provisions, does not mean the contract is exploitative or anticompetitive. ^[78] Additionally, the FTC has provided incomprehensive support for its proposition that employers are acting in bad faith and are counting on their employees being ignorant of their rights, (i.e. using unequal bargaining power to exploit their employees). ^[79]  Many courts use the existence of unequal bargaining power as a factor, or the “beginning” of an analysis into whether a contract provision was unfair.^[80]  However, for a contract term to be held unenforceable, courts must usually find that the adhesion contract term was “unconscionable” or violated the weaker party’s “reasonable expectations,” or ran afoul of some other doctrine of contract law.^[81]  For example, in Illinois, “[the] law does not void contracts where parties have unequal bargaining power,” and “courts even enforce the terms of contracts in which the plaintiff has no meaningful choice as to the provider of a basic service ….”^[82]  The FTC suggests that the existence of unequal bargaining power alone is a justification for the banning of contract provisions.^[83]  This reasoning, followed to its conclusion, implies that standard form contracts as a whole, could be held unenforceable and completely breaks with the law of contract analysis in many, if not, most, jurisdictions of the United States.^[84] 

            Standard form contracts offer unparalleled efficiency in the contracting relationship, regardless of the bargaining power between parties, and they are the predominant method of contracting in the American economy.  As far back as 2000, standard form contracts made up over 99% of all contracts “used in commercial and consumer transactions for the transfer of goods, services, and software.”^[85]  The outlawing of standard form contracts and provisions could, quite literally, grind the economy to a halt if every contract is required to be equally bargained for.

            Under the FTC’s proposed guidance, employers might be forced to write entirely new contracts for each transaction, even if parties were perfectly happy with the standard terms.  An employer and an employee might be required to sit down with attorneys every time a new hire occurred.  Alternatively, they might simply have to muddle through the negotiations and write provisions on their own.  Both scenarios could require more money and effort to be expended on the part of both the employee and the employer, to the point where either party (or both) might decide that the relationship is not worth it.  With the existence of standard form contracts,  consumers can focus on the things they care about – price and quantity – and disregard the standard form language that is important to only the employer in most situations, such as required disclosures.  If the FTC’s goal is fairness for employees (and consumers), the goal might be better served by focusing on the actual content of certain contract provisions, rather than blanket bans.^[86]  If the FTC had merely found that “non-compete clauses” were anticompetitive because they foreclose movement in the labor market by some significant amount, it might make sense that standard form contracts and other contracts could not include non-compete agreements.  However, by the FTC’s own statement, “unequal bargaining power,” embodied by the standard form contract, preliminarily leads to the determination that non-compete clauses are “exploitative.” ^[87]  By focusing on unequal bargaining power, the FTC afforded itself a convenient outlet for future action on other unfavorable (according to the FTC) contracting interactions.

            Indeed, the Commission’s implication that contracts executed by parties with unequal bargaining power, such as a typical standard form contract, means that standard form contracts could easily meet the FTC’s new test for the “unfairness” of “methods of competition.”^[88] According to the Commission, “unfairness,” requires that the action “goes beyond competition on the merits,” which means that (1) the conduct is “coercive, exploitative, collusive, abusive, deceptive, predatory, or involve[s] the use of economic power of a similar nature … [or] otherwise restrictive or exclusionary depending on the circumstances,” and (2) the practice “tends to foreclose or impair the opportunities of market participants, reduce competition between rivals, limit choice, or otherwise harm consumers.”^[89]

            In the proposed non-compete ban, the Commission asserts that those contracts executed with unequal bargaining power on a “standard-form basis” are “preliminarily exploitative,” which means most (if not all) standard form contracts directly satisfy the first prong of the test without any inquiry into the actual content of the contract itself.^[90]  Likewise, the second prong of the FTC’s new unfairness test is immediately satisfied by standard form contracts (and pretty much all contracts) the minute they are written because, by their nature, all contracts “limit choice.”^[91]

            Several contractual provisions could be on the chopping block if the FTC follows its rationale to its natural conclusion.  Non-disclosure agreements, client or customer non-solicitation agreements, no-business agreements, and other less obvious provisions such as liquidated damages provisions, training-repayment agreements, choice of law provisions, forum selection provisions, and arbitration clauses are all at risk of being outlawed by the FTC.^[92]  No-poach and no-recruit agreements have already been identified by the FTC as contract provisions that could be “written so broadly” as to constitute a de facto non-compete agreement, suggesting that the FTC itself is aware enough to recognize that its proposed rule would encompass a far larger swath of contractual behavior than simply non-compete agreements.^[93]

            Furthermore, if the Commission is allowed to ban contractual provisions based on unequal bargaining power and/or their presentation on a standard form basis, no party could add those provisions to a contract even if both the employer (or seller) and employee (or buyer) agree that they are favorable.  Both contracting parties can and should advocate for themselves, but for efficiencies sake, should have the tools (like boilerplate language and long-standing contractual provisions) to help ease the process.^[94] 

            The FTC is further breaking from traditional antitrust enforcement by possibly choosing to find non-compete agreements “per se” or presumptively illegal.^[95]  Antitrust law offers adequate mechanisms for the FTC to analyze contract provisions under the rule of reason or even the quick look analysis.^[96]  By leaving the door open for a further assault on the standard form contract and everyday contractual relationships, the FTC is no-so-subtly grasping at economic power on a level not before seen.  

V.              Conclusion

            If the FTC begins to hold that contract provisions are anticompetitive and exploitative because they have been offered on a standard form basis between two parties of unequal bargaining power, thus essentially outlawing the standard form contract, it will lead to gross inefficiency, and a restructuring of the foundation of the American economy – the contracting relationship. American contract law, built up over hundreds of years of English common law, could be altered irrevocably by three pages buried in the FTC’s proposed non-compete ban.

            This path could lead to the slowing of economic behavior in the country, in both the employment relationships that the FTC is concerned about, as well as consumer/seller relationships, which the FTC hinted at in their proposed policy.  The FTC may have buried the lede in their proposed policy, but with such extreme potential consequences, it is unlikely to stay buried for long.

_____________________________________

* B.A., Saint Louis University, 2021; J.D. Candidate, University of Missouri School of Law, 2024; Associate Member, Missouri Law Review, 2022–2023.  I am grateful to Professor Thomas A. Lambert, Wall Chair in Corporate Law and Governance, for his inspiration, feedback, and guidance during the writing of this piece, and for instilling in me a passion for Contract and Antitrust Law.  I am also grateful to the Missouri Law Review for its help in the editing process.  I would also like to thank my fiancé and my mother for their love and support.

^[1] “Why Do We ‘Bury the Lede?’” Merriam-Webster.com 2023 http://www.merriam-webster.com/words-at-play/bury-the-lede-versus-lead.

^[2] Non-Compete Clause Rule, 88 Fed. Reg. 3482 (Jan 19, 2023) (to be codified at 16 C.F.R. pt. 910).

^[3] Id.

^[4] Fed. Trade Comm’n , Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act Commission File No. P221202, 1, (Nov 10, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyStatement.pdf.

^[5] Non-Compete Clause Rule, 88 Fed. Reg. at 3502-503.

^[6] 15 U.S.C §§ 41–58.

^[7] 15 U.S.C § 45.

^[8] C. Influence of the Federal Trade Commission Act, Bus. & Prof.C. 17200 Ch. 2-C.

^[9] 15 U.S.C §§ 41–58.

^[10] Id.

^[11] F.T.C. v. Sperry & Hutchinson Co., 405 U.S. 233 (1972); C. Influence of the Federal Trade Commission Act, Bus. & Prof.C. 17200 Ch. 2-C.

^[12] Fed. Trade Comm’n, The Enforcers, ftc.gov, (2023) https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/enforcers.

^[13] Id.

^[14] Id.

^[15] Id.

^[16] Id.

^[17] Jay B. Sykes, Cong. Rsch. Serv. LSB10635, The FTC’s Competition Rulemaking Authority 1, 1–3 (2023) (citing 15 USC § 46(g)).

^[18] Id at 1.

^[19] Id. at 2.

^[20] Id.

^[21] Id.

^[22] Kate R. Bowers, Cong. Rsch. Serv., IFI2077, The Major Questions Doctrine 1 (2022).

^[23] Fed. Trade Comm’n , Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act Commission File No. P221202, 12-13, (Nov 10, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyStatement.pdf.

^[24] Id. at 13.

^[25] Id.

^[26] See Fed. Trade Comm’n, FTC Cracks Down on Companies That Impose Harmful Noncompete Restrictions on Thousands of Workers, Ftc.gov, (Jan 4, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-cracks-down-companies-impose-harmful-noncompete-restrictions-thousands-workers.

^[27] Donald J. Aspelund & Joan E. Beckner, Employee Noncompetition Law § 3:2. Employee noncompetition agreements (2022 ed.).

^[28] Non-Compete Clause Rule, 88 Fed. Reg. 3482, 3494 (Jan 19, 2023) (to be codified at 16 C.F.R. pt. 910); see also Coates v. Bastian Brothers, Inc., 741 N.W.2d 539 (Mich. Ct. App. 2007); Doan Fam. Corp. v. Arnberger, 522 P.3d 364 (Kan. Ct. App. 2022).

^[29] Raimonde v. Van Vlerah, 325 N.E.2d 544, 547 (Ohio 1975).

^[30] Id. at 547.

^[31] Lumber Liquidators, Inc. v. Cabinets To Go, LLC, 415 F. Supp. 3d 703, 716 (E.D. Va. 2019).

^[32] Shmuel I. Becher & Esther Unger-Aviram, The Law of Standard Form Contracts: Misguided Intuitions and Suggestions for Reconstruction, 8 DePaul Bus. & Com. L.J. 199, 201 (2010).

^[33] Joy T. Carmichael et al., New York Jurisprudence § 140, (2nd ed. 2023).

^[34] 1 Corbin on Contracts Desk Edition § 24.18, (2023).

^[35] Id.

^[36] Id.

^[37] Id.

^[38] Id.

^[39] Graham v. Scissor-Tail, Inc., 28 Cal. 3d 807, 820 (Cal. 1981).

^[40] Id. (quoting Wheeler v. St. Joseph Hospital133 Cal. Rptr. 775, 778 (1976)).

^[41] See Margaret Jane Radin, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law, 85 (Princeton University Press 2013).

^[42] Id.

^[43] Id; Restatement (Second) of Contracts § 211 (Am. L. Inst. 1981).

^[44] FED. TRADE COMM’N , POLICY STATEMENT REGARDING THE SCOPE OF UNFAIR METHODS OF COMPETITION UNDER SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT COMMISSION FILE NO. P221202, 8-10, (Nov 10, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyStatement.pdf.

^[45] Thomas A. Lambert & Tate Cooper, Neo-Brandeisianism’s Democracy Paradox, J. Corp. L (forthcoming 2023) (manuscript at 22).

^[46] Id.

^[47] Id. at 22.

^[48] Fed. Trade Comm’n , Policy Statement, supra note 44.

^[49] Id. pages 1–10.

^[50] Id. at 8.

^[51] Id.

^[52] Id.

^[53] Id.

^[54] Id.

^[55] Id. According to the FTC, acceptable competition on the merits can include offering better employment terms, better products/services, truthful advertising, research and development investment, and high-quality business “acumen.” Id. at 9

^[56] Id. at 9.

^[57] Id.

^[58] Non-Compete Clause Rule, 88 Fed. Reg. 3482 (Jan 19, 2023) (to be codified at 16 C.F.R. pt. 910).

^[59] Id. at 3482.

^[60] Id.. at 3510–14.

^[61] Id. at 3510–14.

^[62] Id. at 3516.

^[63] Id. at 3484.

^[64] Id.

^[65] Id.

^[66] Id.

^[67] Id.

^[68] Id.

^[69] Id.

^[70] Id.

^[71] Id. at 3502–03.

^[72] Id. at 3503 (Noting that employers are more likely to have the assistance of counsel when drafting contracts and that employees may not have the same level of sophistication.).

^[73] Id.

^[74] Id.

^[75] Id.

^[76] Id.

^[77] Id.

^[78] Aditi Bagchi, The Myth of Equality in the Employment Relation, MICH. ST. L. REV 580 (2009); see also Kloss v. Edward D. Jones & Co., 54 P.3d 1, 7 (Mont. 2002).  

^[79] Non-Compete Clause Rule, 88 Fed. Reg. at 3503.

^[80] Kloss v. Edward D. Jones & Co., 54 P.3d 1, 7 (Mont. 2002) (“It is a recognition of the reality that contracts do not always reflect terms that were bargained for at arm’s length. Instead, terms are sometimes dictated by one party to another who has no bargaining power and no realistic options. The law pertaining to contracts of adhesion recognizes that in certain circumstances, traditional assumptions associated with contract law are unfounded.  However, determining that a contract is a contract of adhesion is not the end of the inquiry in Montana.”)

^[81] See supra notes 37–43; John E Murry Jr. & Timothy Murry, Corbin on Contracts Desk Edition § 24.18 (2021); see Graham v. Scissor-Tail, Inc., 28 Cal. 3d 807, 820 (Cal. 1981); Thakkar v. ProctorU Inc., 571 F. Supp. 3d 927, 936 (C.D. Ill. 2021) (quoting Koveleskie v. SBC Capital Markets, 167 F.3d. 361, 367 (7th Cir. 1999) and Williams v. Jo-Carroll Energy, Inc., 890 N.E.2d 566, 569 (Ill. App. 2d Dist. 2008)).

^[82] Thakkar v. ProctorU Inc., 571 F. Supp. 3d 927, 936 (C.D. Ill. 2021) (quoting Koveleskie v. SBC Capital Markets, 167 F.3d. 361, 367 (7th Cir. 1999) and Williams v. Jo-Carroll Energy, Inc., 890 N.E.2d 566, 569 (Ill. App. 2d Dist. 2008)).

^[83] Id.

^[84] John J. A. Burke, Contract As Commodity: A Nonfiction Approach, 24 Seton Hall Legis. J. 285, 290 (2000).

^[85] Id.

^[86] Id.

^[87] Non-Compete Clause Rule, 88 Fed. Reg. 3482, 3503 (Jan 19, 2023) (to be codified at 16 C.F.R. pt. 910).

^[88] FED. TRADE COMM’N , POLICY STATEMENT REGARDING THE SCOPE OF UNFAIR METHODS OF COMPETITION UNDER SECTION 5 OF THE FEDERAL TRADE COMMISSION ACT COMMISSION FILE NO. P221202, 9, (Nov 10, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyStatement.pdf.

^[89] Id.

^[90] Lambert & Cooper, supra note 45, at 28–30.

^[91] Id.

^[92] Non-Compete Clause Rule, 88 Fed. Reg. 3482, 3484 (Jan 19, 2023) (to be codified at 16 C.F.R. pt. 910).

^[93] Id.

^[94] Steven W. Feldman, Mutual Assent, Normative Degradation, and Mass Market Standard Form Contracts-A Two-Part Critique of Boilerplate: The Fine Print, Vanishing Rights and the Rule of Law (Part I), 62 Clev. St. L. Rev. 373, 386 (2014).

^[95] Non-Compete Clause Rule, 88 Fed. Reg. 3512 (Jan 19, 2023) (to be codified at 16 C.F.R. pt. 910).

^[96] U.S. v. Brown U. in Providence in State of R.I., 5 F.3d 658, 669 (3d Cir. 1993).