Can the FTC Really Ban Non-Competition Provisions? (VL781)

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:27):
And Hello, folks, and welcome to anotherepisode of virtual legality.
I'm your host Richard Hoeg, Managing Member ofthe Hoaglaw Business Law Firm of Northville
Michigan.
Today, we're gonna try to hit a few differentbuttons, do a few different things with the

(00:48):
structure of this episode.
So if you bear with me, I think we can do thisa little bit differently than we have in the
past.
Now today, we're gonna talk about one of ourfavorite US government agencies, the Federal
Trade Commission, Not about blocking a gamingdeal or dealing with horizontal or vertical
mergers, but instead with what their regulatorypowers are, and aren't in respect to some

(01:11):
important stuff.
And that important stuff today is going to bediscussion of non compete agreements or non
compete provisions.
And if you aren't familiar with that, this ismy wheelhouse, and so I thought I would bring
up a redacted version of the agreements that Iusually draft for this kind of thing in order
to explain what this is if you haven't seen onebefore, but I assume that most people have some

(01:34):
notion of what a non competition agreement orprovision is.
This is a document called the proprietaryinformation inventions assignment and non
competition agreement that I often draft aversion of for my clients that are onboarding
new personnel to work with their company,either in a consulting or employment role.
And not all of these locate identical, not allthese operate the same, but we can talk about

(01:57):
this in broad strokes to discuss what the FTChas done, what you might have seen in the news,
and talk about why that should be allowed orshouldn't be allowed based on what the the
government rules and regulations are.
So with that as background, Let's take a lookat this PIIA, as I generally call it, and you
can see that the first kind of operativeprovision here is that you'll keep our

(02:20):
information confidential.
Right?
We're bringing you into the company.
We're going to share some of our secret sauceHoeg we do things.
And because we are bringing you into the fold,You agree that you will keep that information
confidential.
You won't use it against us.
That's kind of the primary first operativeprovision in an agreement like this one.
The next one which you might also be familiarwith is inventions assignment.

(02:41):
Right?
That's where the PIA comes from.
The inventions assignment is when you makesomething that we pay for, It will be ours
instead of yours.
Right?
And this is a conversation that we have withartists in the intellectual property space in
video games and fan art and everything else.
All the time.
And works made for hire is the is the concepthere if you are an employee of the company that

(03:03):
essentially when we pay your salary, we arepaying for your intellectual output.
And if push comes to shove, when we look atwhat you made, who is who owns it, that will be
us and not you.
And some people don't like this, and it'sunderstandable why because you are creating
something out of your own brain, but you aregetting paid for that from a corporate side of
things.
And as a disclaimer, of course, I am acorporate lawyer.

(03:26):
That's why I can even bring up a contract likethis one.
And so take that with whatever grain of saltyou wanna apply to the notion that I am, in
fact, a corporate lawyer because I'm gonna havecertain thoughts about how these things operate
that other lawyers and other people might ormight not agree with.
So the goal of a video like this in virtuallegality is always to hopefully inform and
educate and let you know what you may not knowalready or or maybe understand better what's

(03:51):
happening in the news and and things like thisaround you.
But you don't have to take my word for any ofthis.
You don't have to take my word as sacrosanct onthese kinds of things.
As we'll see towards the end of this video, Ifyou get a lot of lawyers in a room, you're
gonna get double the amount of opinions on anyof this stuff.
So we'll see that in force as part of thisdiscussion.
But as we continue on, we're assigning theintellectual property, then we get into kind of

(04:13):
the more operative details here.
First, We have a non solicitation or hire ofcompany employees.
This says for your period of service for thecompany and for a tail period for 1 year
hereafter in this kind of redacted version ofthe document, you won't hire away our
employees, which makes sense.
Right?
You're getting relationships that you wouldn'totherwise get if we weren't bringing you on

(04:37):
board to our enterprise, you won't steal ourpeople.
And to broaden that, you also won't steal ournon employees.
Right?
You're gonna have relationships with ourcontractors, potentially with vendors that are
performing services for us, you won't takethose people away from us either.
And then finally, you won't steal our clients.
Right?
And this does extend past the period of timewhen you have a relationship with the company

(04:57):
on the premise that you will have gained thoserelationships and they will still be of value
for a certain amount of time after you leaveour employee or relationship with us.
So that's the non solicitation concepts.
Pay attention to those because they probablysurvived this FTC action, but it's a little bit
unclear based on the language that the FTC haschosen to use.

(05:18):
And then we get the non competition provision.
The the crux of the matter here, the discussionpoint with the FTC, and that is that you won't
compete with us and you won't own any entitythat competes with us at the 1% level, or
higher and that is for 1 year hereafter.
You'd have geographical restrictions put onthis.

(05:39):
An important point to note in the noncompetition context is that these provisions
and these agreements are already looked atpretty scans by the judicial systems in the
various states of the United States.
Right?
So For non competition, the reasoning has to bethat they were gay they were gaining access to
some secret sauce, some trade secrets, someimportant information, some proprietary

(06:01):
information that is in their brain that they'veotherwise agreed to keep confidential, but that
we can't really track whether or not they useagainst you because it is kind of all
incorporated into their makeup and theirthought processes.
So because we can't make that separation, It'sdeemed to be reasonable by most states in the
country that you can protect yourself frombeing competed with directly for a period of

(06:24):
some time after they leave your employee.
And that's what this represents.
1 year, Michigan generally will allow, termafter the period of employment of up to 2
years, different states have different amountsfor that.
Different states have different restrictions onwhat is an acceptable geography for this,
whether it's the whole state, whether it's thecounty in which the employer operates, whether

(06:45):
it's all locations where employer sells goodsor services, which can get broad, especially in
the internet age, different states havedifferent rules around these things.
One of the most notable of which is thatCalifornia, a state in the United States,
obviously, is a jurisdiction which looks verynegatively at non competition provisions on the
whole Hoeg which are generally unenforceable inCalifornia in this context.

(07:09):
Right?
So if you are starting a California company, ifyou're operating in California, if you're
hiring people in the video game industry inCalifornia, Generally speaking, you don't have
one of these provisions or if you do, you tryto make it understood that a court can take
this out without ripping apart the entireagreement.
And California has operated under the thosepremises for a long time I think probably going

(07:33):
back to at least when I was in law school, butit is one thing that you know if you're a
corporate lawyer in the United States, thatdifferent jurisdictions have these different
rules.
California not allowing non competitionprovisions was an important one to know.
And so reasonable minds can differ to whetherthese are successful or not.
But as it stands before the FTC's action, howthese entities operate, a non competition

(07:56):
provision that is reasonably tailored to whatan employee is learning about your company and
what geography it attaches to has been deemedto be valid in most jurisdictions in the United
States.
And not until now seen as terribly,anticompetitive or unfair in a competitive

(08:17):
sense.
And though people don't like these necessarilybecause they do prevent certain movement of
their labor outside of the initial, enterprisethat they're working for, they have been held
to be valid in most circumstances as Idescribed.
So that's kind of the context of this.
I don't wanna scroll too much further becausewhile I think I redacted everything, I don't

(08:38):
want to accidentally disclose random bits andpieces online with contracts that I have
drafted.
So That's a non competition provision.
That's what you see in practice, and certaincompanies have definitely gone too far with
this.
We just described how courts are likely to lookat these things.
Other companies have had them applied to thelowest level workers in their enterprise for

(09:00):
longer periods of time for periods of time thataren't really deemed to be reasonable by the
courts and tried to save them with a provisionlike this one that we see here that says these
are reasonable and to a if a court decidesaren't reasonable, the court can kind of change
them and keep the keep the contract in place.
But because companies have been doing that, theFTC and others have looked at this kind of

(09:25):
structure and said, well, maybe that shouldn'tbe something that is allowed, which brings us
to the Federal Trade Commission Act.
Right?
So this is a section of law.
I brought it up 15 USC 45 that talks about whatthe FTC is supposed to do, and this law says as
follows.
Unfair methods of competition are herebydeclared unlawful.

(09:47):
Now, notably in this section, unfair methods ofcompetition, the word unfair or even methods or
competition, aren't really defined.
A restriction that they have to be affectingcommerce.
That's called a constitutional hook that isdesigned to bring this law under the control of
the federal legislature through theconstitutional right to make laws regarding

(10:07):
commerce, but otherwise really doesn't helpinform what the definition is.
Unfair methods of competition are herebydeclared unlawful is basically all the FTC has
to go on.
The commission, that's the FTC to you and me,is hereby empowered and directed to prevent
persons, partnerships, or corporations fromusing unfair methods of competition.

(10:28):
And this also includes deceptive acts ofpractices, but that's what we're looking at
here.
And so when you look at what the FTC isempowered to do, the primary impetus of their
authority as given to them by the legislatureof the United States is that unfair methods of
competition are unlawful, and you guys aregonna be the cops that help prevent persons,

(10:48):
partnerships, or corporations, entities in theUnited States from using those unlawful methods
of competition.
And that's almost all that we've got, but notquite.
Right?
So that's the FTC Act.
That is the provision under which they aregoing to make some rules here that we're going
to look at and the in another section, theyhave been granted the power.
The commission shall also have the power.

(11:11):
From time to time to make rules and regulationsfor the purpose of carrying out the provisions
of this subchapter.
And you see this exception here that we'regonna look at in just a second, But the
question becomes, as we look at these things,is this a substantive right to make rules?
Right, is from time to time classifycorporations and make rules and regulations for

(11:33):
the purpose of carrying out the provisions ofthe subject chapter the right to define what
unfair competition is, what deceptive acts andpractices are.
And to make things even more confused for thisparticular statutory interpretation question,
we have to look at this exception in 57 AA 2,which says the following.

(11:54):
The commission shall have no authority otherthan its authority under this section to
prescribe any rule with respect to unfair ordeceptive apps or practices.
Proceeding sentence shall not affect anyauthority of the commission to prescribe rules
and general statements of policy with respectto unfair methods of competition.
So when we look at this, we have some moreconfusing language that gets added on that says

(12:17):
you don't get to prescribe rules with respectto unfair or deceptive acts or practices.
But that's not gonna prevent you from makinggeneral statements of policy with respect to
unfair methods of competition.
So when we look at an unfair method ofcompetition as we're going to look at here, the
question becomes, does the commission have theright to essentially define this for the

(12:38):
legislature.
And one could reasonably look at this and say,no.
The legislature had the right to define what itmeant here, and the act of not defining it was
its own kind of political decision that theCongress of the United States made.
You don't have to love it.
In fact, can think it's very weak becauseCongress didn't want to get into the weeds as
to what they were actually making unlawfulhere.

(12:58):
But regardless, if they have the ability tomake this law, One can argue that they have the
ability to define or not define this provisionand that the commission can't just say what
unfair methods of competition are.
That's the prospect of the judiciary, right, toand to back up a step, if you don't know how
the United States political system isorganized, we have 3 co equal branches of

(13:20):
government One is the legislative, which is theone that writes these laws.
Right?
1 is the judicial, which is the one thatinterprets the laws, and one is the executive,
which is what enforces the laws.
The FTC here is operating as an executiveagency enforcing the laws that are written for
it by Congress.
And in so doing, they have daned now tointerpret this section here as giving them the

(13:45):
authority to write rules defining what non fairmethod of competition is rather than to have
the court system interpret what an unfairmethod of competition is, and there are a lot
of reasonable minds that differ prettyprofusely as to whether or not that is or
should be allowed.
So let's take a look at what the FTC said.
On April 23 2024, This is their fact sheet fortheir final proposed rule.

(14:07):
This would go into effect, in a certain numberof months after this is proposed, but as we
will see in as as part of this video, It'salready been sued over, and I think that
lawsuit is likely to have some success.
So what did they try to do?
The final rule bans new non competes with allworkers, including senior executives.
You cannot enter into a new non competeprovision non compete agreement after the date

(14:31):
that this would go into effect.
Specifically, the final rule provides that itis an unfair method of competition, and
therefore, violation of section 5 of the FTCact, what we just read, for employers to enter
into non competes with workers after theeffective date.
For existing non competes, the final ruleadopts a different approach for senior
executives than for other workers.
For senior executives, existing non competescan remain in force.

(14:54):
Existing non competes with workers other thansenior executives are not enforceable after the
effective date of the final rule.
Now one thing that comes to mind here for me isthat not only is this kind of retroactively
operative and that whatever contracts arealready out there with my clients, with other
people's clients, with every company that has anon competition provision, in the United States

(15:15):
that those all coming undone is going to changethe nature of the risk profiles that these
employers and employees have with each otheroutside of what was negotiated for.
And non competition agreements can benegotiated for for separate compensation.
So you already have a kind of taking thisquestion with respect to, okay.
If I'm a company and I was operating under thelaws that existed when I entered into this

(15:38):
contract and I signed a non competitionagreement with somebody that was willing to
sign it in exchange for a $100,000, and I gavehim a $100,000 It doesn't appear to have any
mechanism of giving me a refund for thatconsideration.
So can you go and retroactively say now thatwhat I entered in 2 years ago easy illegal and
has to be rescinded, and I don't get myconsideration back.

(16:01):
They just get to remove theirs.
That's a question in of itself.
The secondary question here is by trying toallow this for senior executives, that that are
none not for other workers, you create thiskind of, grandfathered in secondary tier of
companies.
Right?
If you have your senior executive signed up toDon competes now, then you get to keep those.

(16:22):
You get that protection into the future, andthat appears to me, to my eyes, to be an
unbalanced competitive benefit that will not berealized by upstarts and new companies that
aren't allowed to enter into noncompetes witheven senior executives after the rule comes
into play.
So that seems to be an issue, which is the waythat this is implemented.
They're clearly trying to allow for kind of thebroadest strokes of why one would have an on

(16:47):
competition provision, right?
A senior executive is the most likely kind ofperson to have trade secret information to have
secret sauce information at a company.
And so the FTC is trying, I think, to play fairwith this a little bit, but the way it's
implemented might be unwise because I do thinkit creates a kind of cast system where if you

(17:08):
existed before this went into place, you'regoing to have senior executive sign up to non
competes and you can't otherwise match thatprotection if you're a company that's just
coming in right now.
And that doesn't seem to be fair to me, butwe'll discuss this as we go further into the
rule analysis.
The FTC estimates that banning non competeswill result in 74 to a $194,000,000,000 in

(17:31):
reduced spending on physician services, 2.7%increase in new firm formation resulting in
85100 new businesses created each year, and anaverage of 17,000 to 29,000 more patents each
year for the next ten Now as we already sawwith respect to the Microsoft deal and some of
the other things we've discussed with the FTC,their estimates at markets and beliefs about

(17:55):
how markets will change or be affected by whatthey do aren't necessarily the strongest.
They are, of course, invested with the abilityand presumably expertise to analyze markets
like this one.
But when you're putting forth such a broadpolicy prescription, as banning of non
competes, you are probably from a politicalperspective kind of burden with trying to make

(18:18):
sure that that makes sense to people I don'tthink there's a lot of good evidence even in
what they've put forth in their documentation,which we will look at as to why this kind of
stuff would happen.
Worker earnings will go up.
400 to $488,000,000,000 in increased wages forworkers over the next decade.
I don't think any of this stuff will reallymaterialize.
I I say that not because I think it changes howthe rule should be interpreted or whether the

(18:40):
FTC has the right to do this because as we saw,they're interpreting a statutory bit of
language, what is an unfair method ofcompetition, and the actual policy prescription
share, what is positive about what they aredoing, aren't important to that interpretation.
Right?
The interpretation really is, is it unfair?
What you should see here is why are noncompetition provisions unfair?

(19:03):
And why should we ban them?
And we will see some of that a little bit intheir actual rule document but whether or not
it's a positive is really outside the ambit ofwhat the FTC is or should be doing and
certainly outside the ambit of whether they cando this.
Ban non competition provisions, which is all tosay.

(19:23):
They wrote a lot about it, and they try tojustify it from a policy perspective because
that's what makes sense the politicalenvironment, but that's not actually what
drives whether or not they have the ability todo this.
So they say pursuant to sections 5 and of theFederal Trade Commission Act.
That's what we looked at to start this video.
The Federal Trade Commission is issuing the noncompete clause rule.

(19:44):
The final rule provides that it is an unfairmethod of competition, and therefore, a
violation of section 5 in general, unfairmethods of competition are unlawful, for
persons too, among other things, enter into noncompete clauses with workers on or after the
final rules effective date.
With respect to existing noncompetes, the finalrule adopts a different approach for senior

(20:05):
executives than for other workers.
For senior executives existing noncompetes canremain in force, while existing noncompetes
with other workers are not enforceable afterthe effective date.
The final rule is effective, insert date, a 120days after date of publication with federal
register.
So 4 months or so from when this gets publishedor was published, in the federal register, it

(20:26):
this will go into effect or so the FTC wouldlike it to be.
Summary of the final rules provisions.
So this is mostly what we saw in the previousdocument.
The commission proposed the noncompete rule onJanuary 19 2023.
Based on the commission's expertise and aftercareful review and consideration of the entire
rulemaking records, they took comments, thecommission adopts the final rule addressing non

(20:47):
competes.
The final rule provides it is an unfair methodof competition for employers to enter into
noncompete clauses with workers on or after therules of effective date.
With respect to existing noncompetes, we getthe senior, executives that can still have
effective noncompete clauses.
The final rule contains separate provisionsdefining unfair methods of competition for the
2 subcategories of workers.

(21:08):
Specifically, the final rule provides that withrespect to a worker other than a senior
executive, it is an unfair method ofcompetition tender into the non competition
clause, or to enforce or attempt to enforce noncompetition clause.
The final rule provides it with to a seniorexecutive.
It is an unfair method of competition for aperson to enter into or attempt to enter into a
non competition clause, etcetera.
This is basically the same as what we justlooked at in the summary.

(21:31):
The final rule defines worker as a naturalperson who works or who previously worked,
whether paid or unpaid without regard to theworker's title or worker status, under any
other state or federal laws, including the butI wanna do one of the workers, employee,
etcetera, who provides service to a person,which is The FTC trying to make worker as broad
as possible.
Right?
You heard me describe employees and contractorsdifferently.

(21:53):
That's because under US labor law and variousstate labor laws.
Those are treated differently.
The FTC wants it to apply to anybody that'sproviding services for anyone else.
And that might have its own kind of breadthissues, but you can see what they're trying to
get at here, which is everyone involved inproviding services will have this ban applied
to them.
The final rule does not limit or affectenforcement of state laws that restrict

(22:14):
noncompetes where the state laws do notconflict with the final rule.
That's best read as where it's more strict thanus that'll still live, but this rule preempt
state laws that conflict with the final rule.
This is gonna be another potential fight withvarious states that wanna have a fight with the
FTC or the federal government, which is to say,okay.
California bans not compete.
That's up to them.
They're their own jurisdiction.

(22:36):
Michigan doesn't.
Michigan now essentially has to enforce thisban by virtue of the FTC saying that it preempt
state law when there's a conflict, is thatgoing to be something that's acceptable to the
state of Michigan, probably Michigan, but otherstates that have a similar kind of stamp to
Michigan.
That's going to be an open question as well.
So why did we do this?

(22:57):
Says the FTC, and we're not gonna read throughall five seventy pages folks.
I promise That's a lot of writing even for theFTC.
The purpose of this rulemaking is to addressconduct at harms fair competition.
Concern about noncompetes dates back centuriesand the evidence of harms has increased
substantially in recent years.
Now that's probably a a problem for the FTC,right, to the extent non competes have existed

(23:19):
for a long time and they have The FTC actcoming into effect, and then the FTC trying to
enforce it as unfair competition now, decadesafter the FTC act went into effect, is probably
an issue for them.
Right?
When we talk about when a regulation is formed,one of the things that informs whether or not a
regulation is going to be legitimate is how thelegislature would have thought of the powers

(23:41):
that it was conveying to the agency to enforcethe statute at the time that the legislation
was written.
And so if non competes have dated backcenturies and they have, then the question
becomes, is this something that the legislaturepassing the FTC act would have seen as unfair
competition at the time.

(24:01):
And if it isn't, and there's no real suggestionthat it is either in this document or
otherwise, then can the FTC essentially takethis broad prescription of writing rules and
regulations to define unfair competition assomething that maybe the original legislature
didn't necessarily think it was.
And reasonable minds can differ on all thisstuff.

(24:21):
This is statutory interpretation.
This is stuff that gets up to the highestlevels of court systems certainly in the United
States, but also in other jurisdictions.
And these are not easy questions, so I don'tmean to pretend that they are, in any respect,
but This is a longstanding potential issue.
We've seen states and state courts deal withthem differently, and now the FTC comes in with

(24:44):
a blanket rule that they would see applied toall of the United States.
The ability of employers to enforce noncompetes has always been restricted based on
public policy concerns that courts haverecognized centuries.
That's the judiciary branch.
For example, in this case, in 17 11, an Englishcase that provided the foundation for American
common law on non competes, The court notedthat workers were vulnerable to exploitation

(25:06):
through noncompetes and that noncompetesthreatened the workers' ability to practice a
trade and earn a living.
Indeed, they are.
Right?
That's why the courts and various jurisdictionshave enforced limitations on geography and
limitations on term for how long these noncompetition provisions can prevent you from
going and competing because of those things.
These concerns have persisted.

(25:26):
Today, non competes between employers andworkers are generally subject to greater
scrutiny under state common law than otheremployment terms because they are often the
product of unequal bargaining power and becausethe employee is likely to give scant attention
to the hardship Hoeg may later suffer throughloss of his livelihood.
Now in fact, I have not noted in eitherdirection that employees give scant attention
to the non solicitation or noncompeteprovisions in their agreements.

(25:49):
These are often the most negotiated thing thatI deal with, but I'm in a very specific kind of
branch of business.
I do a lot of startup and tech work, and peopleare always reading through their offering
letters and agreement documents like the ones Ishowed at the beginning of this video.
And so I do think that many folks have greaterunderstanding of what a non compete could

(26:09):
potentially cost them, then maybe is thoughtthrough by this early court case in the 18th
century.
For these reasons, state courts oftencharacterize noncompetes as disfavored.
And I think that's apt.
Furthermore, as contracts in restraint oftrade, and Hoeg might recognize that language
as the Sherman act, Noncompetes have alwaysbeen subject to our nations antitrust laws.

(26:30):
And this is probably too broad.
Right?
We talked about the Sherman Act.
We talked about the way that it is drafted tobasically apply to any contract ever into ever
entered into by any party because contracts areby their nature strengths of some kind or
another and that the courts have enforced theSherman Act to require an unreasonable
restraint of trade.
The FTC's obviously kind of had issues withthose readings of the Sherman Act, even if

(26:55):
they're decades old in precedent setting for along, long time, and by lighting the kind of
notion of what is an unreasonable restraint oftrade here, you have to see seeks to have this
thought of as something that could be enforcedunder the Sherman Act but it's worth noting
here as part of the legal analysis that the FTCisn't dumb enough to try to make this rule an

(27:16):
interpretation under the Sherman Act.
Right?
This is a substantive rule under section 5 ofthe FTC Act.
We've talked about this in other videos on thischannel before.
And so it isn't really related to the ShermanAct at all.
The FTC is just trying to attach this notionthat non competes are bad to other precedent
that they think is helpful to them.
The Supreme Court held that several tobaccocompanies violated both section 1 and section 2

(27:40):
of the Sherman Act because of the constantlyrecurring use of noncompete among other
practices.
Now worth noting in this paragraph is that asthe FTC describes it, this is a part of an a
broader sherman act claim of monopolization andrestraint of trade and that the reason this
company got in trouble was because ofconstantly recurring noncompetes.

(28:00):
And other things that could basically make itunfair, make it problematic in the way that it
was being used.
Right?
A blanket ban on something is very differentfrom an as applied kind of this is what you're
doing wrong with non beats.
You're making them all 50 years.
You're applying them to the janitorial staff atyour company.
None of this should work the way it is.
That's unfair competition.

(28:21):
We can bring a claim against you.
The courts can say, yeah, that's probablyright.
That's a problem.
Thank you FTC for bringing it to our attention.
A blanket ban is saying, even those instanceswhere a state would find it to be reasonable.
We are coming on top of that state and saying,no.
It is not reasonable for any reason And so theFTC is kind of stealing a base here, which is

(28:41):
worth noting, and certainly the court systemand others that are looking at this issue have
noted it as well.
Concerns about non compete have increasedsubstantially in recent years, in light of
empirical research showing that they tend toharm competitive conditions in labor product
and service markets.
And here we have the FTC very similar to theMicrosoft transaction looking at the antitrust

(29:02):
laws and the ambit of authority given to theand perhaps broadening it out a little bit
further than either the original legislativeintent or what has historically been the ambit
of the FTC, which is this notion of protectinglabor, and and service markets.
Right?
Product market is probably not kind of apthere.
They're just trying to add that because that iswhat is more within their wheelhouse.

(29:26):
But here, talking about labor changes, beingable to protect labor is distinct from the
actual entities competing with each other.
Right?
Or to broaden this out to a kind of non legaleasy understanding, What is unfair as competing
between company a and company b when 1 or bothsigns a non competition provision with their

(29:47):
employees?
Hoeg is that unfair?
How is that an unfair method of competition?
How is that disadvantageing another partywithin the competitive environment?
Again, like we said, in that Microsoft series,the role of the antitrust act, the role of the
FTC act is not to benefit given competitorsagainst one another, It is to benefit
competition on the whole.

(30:08):
So how do these contracts in of themselves harmcompetition?
And one way you could say it is in the laborand service markets, which is I think what the
FTC is attaching to here, which is to say thatif an individual is restricted from competing
with you in some material way, then they're notgonna be on the market for whatever your

(30:29):
competitor is going to be hiring for and withthat reduction in supply of potential labor
sources that cost to your competitor mightincrease and otherwise prevent them from
competing on a reasonable level with you.
But to the extent that the labor priceincreases, that seems to be something that the
FTC is aimed at, certainly, in that summary ofthis rule proposal.

(30:50):
So they appear to be coming at it for multipledifferent directions.
It's a little bit hard to see exactly why whatthey propose here would be unfair competition
among the parties that they are ostensibly,regulating.
Right?
They're not regulating the workers they'reregulating the companies and the ambit of
authority given to them under the FTC act isthat they can regulate unfair methods of

(31:13):
competition.
So they have to, at some point, state why thisis unfair, not just why it hurts labor markets
or why they don't like it.
Right?
And they go for five hundred pages herediscussing various comments.
And dismissing the comments that say that theyshouldn't do this or that they should restrict
it in some way and backing up the comments thatsay this is a great idea, which is what you
would expect from a document like this.

(31:34):
That's fine.
But I don't really want to dive too much moredeeply into this.
I think 17 twenty pages out of 570 is actuallyenough to give you the the lay of the land
here.
What I do wanna talk about is that as one wouldexpect, they're already getting sued over this.
I wanted to look into this lawsuit just alittle bit.

(31:54):
This is from the Chamber of Commerce of theUnited States of America, which despite the
lofty title, is not an agency or other kind ofgroup in the United States government.
It is an advocacy organization, what you mightcall a lobbyist group for businesses, small,
medium, and large.
And they're suing the Federal Trade Commissionfor essentially not having the authority to do
this.
Right?

(32:14):
So if we scroll down a little bit becauselawsuits are long, we see Recognizing that a
company is only as strong as its people, manybusinesses expend considerable time and
resources training and developing theiremployees.
They also allow those employees access tohighly sensitive proprietary information.
Having invested in their people and entrustedthem with valuable company secrets, Those
businesses have strong interest in preventingcompetitor businesses from free riding on those

(32:38):
investments or gaining improper access toconfidential information.
For centuries, US businesses have sought toprotect those critical interests by entering
into reasonable non compete agreements withtheir employees.
Again, this is obviously the lawsuit againstthe FTC.
These are the people saying that we should beallowed to enter an endoscopy provision, so
they're gonna give the lily a little bit here.
But, certainly, the judicial precedence inAmerica and in general in common law

(33:01):
jurisdictions is that there is a version of noncompete agreements, non agreement, non compete
provisions that are reasonable by geography, byterm, and what have you, and that there is a
reasonable way to enter into these provisionsin order to protect that proprietary
information.
Many businesses continue to rely on targetednon compete agreements for these same reasons

(33:22):
today.
Non competes typically require an employee toagree as a condition of employment or in
exchange for compensation, if the employeedecides to leave the company, he will not work
for the employer's competitors or own an interinterest in those competitors for a limited
period of time thereafter.
These agreements benefit employers and workersalike.
I'm not entirely sure about the latter.
The employer protects its workforce investmentsin sensitive information, and the worker

(33:45):
benefits from increased training, access tomore information, and a chance to bargain for
higher pay.
Now you always have a chance to have bargainfor higher pay.
I'm not sure the non competition provisionactually enhances that, but certainly there is
a level of comfort that especially, techcompanies and companies are very much based on
the intellectual property secret sauce can havewith getting those relationships tightened up

(34:08):
through a contractual or other relationshipdocument.
And I do think that there is value in that inmaking sure that people are willing to hire
folks Right?
I've got a lot of clients, a lot of foundersthat are from the get go, very concerned that
this idea that they have, this intellectualproperty, that they're generating or developing
is something that could be stolen by a bigger,more robust enterprise.

(34:32):
And if they were to do that, then their entirebusiness model would decline, and so they're
very cautious about bringing people on as itstands.
And I do think there's a chance that if a banof this type were to be allowed, that they
would be more reluctant to hire on strangers orother folks that they don't have an existing
trust relationship with.
And so I think that is certainly from a policyperspective, something to think about.

(34:55):
But, obviously, the FTC is not a policy body.
Right?
They aren't elected representatives of thepeople.
They are appointed by various politicians overa course of years, and they are staffed by
various people within the executive branchbureaucracy of the United States.
So they aren't technically policy makers asdescribed here, in this lawsuit or in the

(35:18):
other, regulations that we've looked at.
They are supposed to just be interpreting whatpolicy decisions have been put before them.
Policy makers in courts have long understoodthe benefits of reasonable non compete
agreements at the same time.
They've also recognized that some non competesmay present an undue burden for some types of
workers or impose overly broad restrictions.
For instance, by preventing an employee fromworking for a firm 100 of miles away or many

(35:40):
years after leaving a job.
And each state has developed its own body oflaw to strike what it believes is the right
balance.
At the federal level by contrast, Congress hasnever enacted a law regulating noncompetes.
And without any such authorizing legislation,federal agencies appropriately have never
sought to regulate non competes on a nationwidebasis.
Right?
So you can see where they're going with this.

(36:00):
They're going to say that the FTC doesn't havethe authority to make a rule of this manner,
and that brings us back to looking at section ghere.
Right?
They have the right to make rules andregulations for the purpose of carrying out the
provisions of the subchapter.
Does that give them the authority tosubstantively write definitions about what
these words mean, or is this more a rule thatsays, okay, to the extent that you're going to

(36:24):
enforce these rules, you can make regulationsabout how your policies are gonna work, what
task forces you're gonna use, when people haveto respond to a notice that you give them,
those kinds of more procedural rules andregulations rather than what we would consider
substantive rules and regulations.
And I think reasonable minds can differ onthis, but I tend to look this provision and
say, while it is written very broadly, theintent appears to be that it would be to give

(36:48):
kind of logistical authority to figure outexactly how you're enforce these things more
than what these things are, which appears to bethe proper embed of the legislative and
judiciary branches of the US government.
But please do let me know in the comments andchat or, in the comments to this video later on
whether or not you agree with that preset,whether or not you think that the FTC authority

(37:10):
granted under the the Federal Trade CommissionAct is broader than that and should give them
the authority to define these things.
For any and all purposes.
That is certainly a position that the FTC seemsto be advancing.
So you are in good standing with at least oneregulatory body in the United States when you
look at this.
But, obviously, this group here believes thatthat's incorrect.

(37:32):
They continue on with their opening gambithere, and say the legal authority is,
restricted.
The FTC Act was enacted in 1914.
Section 5 of that act declared that unfairmethods of competition and commerce are
unlawful and it empowered and directed thecommission to prevent entities subject to its
jurisdiction from using such methods.
Congress removed certain enumerated industries,activities, or entities such as banks from the

(37:54):
commission's jurisdiction, but otherwiseenvision a commission whose purview would cover
commerce across the national economy.
The term unfair methods of competitioncompetition was an expression new in the law
when it first appeared in the FTC act.
Congress purposely introduced this phrase todistinguish the Commission's authority from the
definition of unfair competition at common law.
Because the meaning which the common law hadgiven to unfair competition was too narrow,

(38:18):
Congress adopted the broader and more flexiblephrase, unfair methods of competition.
Using this new phrase also made clear thatCongress designed section 5 to extend beyond
the reach of other antitrust laws, most notablythe Sherman Act whose texts did not include the
term unfair methods of competition.
In particular, Congress wanted the commissionto apply a standard that would reach conduct
not captured by other antitrust laws and therule of reason which courts applied when

(38:40):
interpreting the Sherman Act.
We've looked at that extensively on thischannel, making it impossible to predict with
any certainty whether courts would condemn themany practices that seriously interfere with
competition.
Allowing the commission to prevent unfairmethods of competition would also help the
commission achieve a core purpose of the act.
To stop trade restraints in their incipiency,before they grew into violations of other

(39:01):
antitrust laws.
In fact, this paragraph, despite being in alawsuit against the FTC, describes the FTC's
authority under the FTC act pretty broadly.
By design, the new phrase unfair methods ofcompetition did not admit a precise definition.
Right?
The legislature didn't define that.
That's what we discussed earlier.
Congress intentionally gave the commissionflexibility to adapt to changing circumstances.

(39:21):
The Supreme Court has affirmed the moreinclusive scope of section 5 on numerous
occasions and has affirmed the power under theact to condemn coercive and unfair practices
that have a tendency to stifle or impaircompetition.
Federal appellate courts have likewise canrecently held that the commission's authority
under section 5 extends beyond the letter ofother antitrust laws.
Right?
It's not limited to the Sherman Act becausethat's not the Sherman Act.

(39:42):
It's a different section.
Congress further expanded the Commission'sjurisdiction over time.
Congress extended the Commission's authority in1938 by adding the further prohibition on
unfair deceptive acts or practices And in 1975,Congress amended the phrase in commerce in
section 5 to in or affecting commerce, a changethat was specifically designed to expand the
commission's jurisdiction, to make it coextensive with the constitutional power of

(40:02):
congress under the congress clause.
Congress gave careful thought to the structureof the FTC as an independent agency entrusted
with considerable responsibility.
The commission will consist of 5 members.
No more than 3 of whom could be part of thesame political party who served for terms of 7
years, the commission would draw untrainedexpert staff to develop the body of law
regarding what constitutes unfair methods ofcompetition and later unfair and deceptive

(40:24):
practices both through acting as a quasijudicial body that determines whether conduct
is an unfair method of competition, inadjudications and through authority to
promulgate legislative rules, delineatingconduct due to an unfair method of foundation.
That's the rules provision that we were justlooking at.
Recognizing that the commission is an expertagency in making such determinations about anti
competitive conduct Courts reviewing commissiondeterminations as to what practices constitutes

(40:47):
an unfair method of competition have given thecommission's decisions a great way.
The FTC act today reflects a careful balancefrom Congress.
So you can see even though they describe it sobroadly, what the lawsuit is going to try to
get to is Okay.
So they have this all brought authority, butit's very limited by exactly what the words say
and what authority they have.
They're not supposed to go outside this.
Because this was a balance that the legislatureput forth for them.

(41:11):
Congress has directed the commission to proceedagainst a broader range of anti competitive
conduct than other antitrust laws like theSherman and Clayton Acts can reach.
On the other hand, Congress has neverestablished a private right of action under
section 5, nor has it authorized the commissionto recover civil penalties or other monetary
relief from parties who engage in unfairmethods of competition?
Instead, the commission may pursue anadjudication under section 5 B or seek an

(41:33):
injunction in federal court under section 13 Bagainst a party that is engaged in an unfair
method of So the act itself talks about whatmethods that the FTC is supposed to be able to
use to go against these unfair methods ofcompetition.
And this ban says this lawsuit is outside that.
The commission cannot obtain civil penalties orother monetary relief against parties for using

(41:54):
an unfair method of competition, Although itcan obtain civil penalties in court, if a party
is ordered to cease and desist from violationand fails to do so.
Alongside section 5, Congress adopted section 6g in which it authorized the commission to make
rules and regulations for the purpose ofcarrying out the provisions of the FTC Act,
which include the acts prohibition on unfairmethods of competition.

(42:15):
That's what we looked at as well.
The plain text of section 5 and section 6 gtaken together empower the commission to
promulgate Rules for the purpose of preventingunfair methods of competition.
The commission has exercised the its authorityunder section 6 g promoagate legislative rules
on many occasions stretching back more thanhalf a century, between 1963 1978, commission

(42:36):
relied on section 6 g to promulgate thefollowing rules.
A rule declaring it an unfair method ofcompetition and an unfair or deceptive act of
practice, to mislead consumers about the sizeof sleeping bags by representing that the cut
size represents the finish size.
A rule declaring it, a UMC, that's unfairmethod of competition, to use the word
automatic or similar words to describehousehold electric sewing machines.

(42:58):
A rule declaring at a UMC to misrepresent nonprismatic instruments as prismatic.
A world declaring it a UMC to advertise ormarket dry cell batteries as leak proof.
A world clearing at a UMC to misrepresent thecut size as the finish size of tablecloths and
similar products.
So we see here a lot of kind of falseadvertising style complaints.
Right?

(43:18):
And we've talked about the FTC's role in falseadvertising and in declarations with
sponsorships and influencers in other videos onthis channel.
A rule declaring at a UMC to misrepresent thatbelts are made of leather if they are made of
other materials, etcetera, etcetera.
This continues on for some time.
A rule declaring at a UMC to make certainmisrepresentations about transistors and

(43:40):
radios.
And we go for paragraphs and paragraphs andparagraphs.
Some of these rules attracted significantattention.
Instance, the commission began the rulemakingprocess to require warnings on cigarette
packages just 1 week after the surgeongeneral's landmark report that determined
smoking is a health hazard.
And that rule was front page news.
Following a lobbying campaign by the tobaccoindustry, Congress supplanted the commission's

(44:01):
regulation with the cigarette labeling andadvertising act but did not disturb the
commission's rulemaking authority.
So, again, this is one avenue that you couldtake.
Right?
If you say non competes are bad, but the FTCdoesn't have the authority to make this rule
because the rules were not written broadlyenough in the FTC act You could say, alright.
Congress, we think non competes are bad.

(44:22):
Get to it, making an on compete ban at acongressional level.
You're the legislature.
You have the authority to do this under theconstitution.
And that's the kind of thing that has happenedhistorically in the past.
In National Petroleum Refinance Associationversus the FTC, The DC circuit expressly upheld
the octane rule as a proper exercise of thecommission's power under section 6 g to make

(44:43):
rules regulating both unfair methods ofcompetition in unfair or deceptive or
practices.
After construing the words of the statutecreating the commission and delineating its
powers, the court held that the terms under thethat under the terms of its governing statute
and under G, the Federal Trade Commission isauthorized to promulgate roles defining the
meaning of the statutory standards of theillegality the Commission is empowered to

(45:04):
prevent.
That interpretation was also reinforced by theconstruction courts, have given similar
provisions in the authorizing statutes of otheradministrative agencies.
Following such rule makings and the DCCircuit's confirmation of the Commission's
rulemaking power in Petroleum Refiners,Congress in 1975 enacted a new section 18 of
the FTC act, That new section introducedspecial procedures beyond those required under

(45:26):
the Administrative Procedure Act forpromulgating rules for unfair deceptive acts or
practices and eliminated the commission'sauthority to issue such rules under 6 g.
That's the last bit of statutory code that welooked at here.
Right?
This is the one that says you have no authorityother than the authority under this section to
prescribe any rule with respect to unfairdeceptive acts or practices, but you're still
allowed to make statements of policy withrespect to unfair methods of competition,

(45:47):
etcetera, etcetera.
Right?
So we've got a lot of confusing different movesin this particular act because Congress moved
multiple times to kind of try to clarify whatwas happening in the judicial and kind of
policy levels.
So continuing with this description Oh, that'show I was reading the wrong document.

(46:10):
That's why that makes sense.
Apologies, folks.
This was actually the FTC backing up itsauthority to do these things.
Not the lawsuit that we were originally lookingat.
That's my fault.
Makes a lot more sense as to why this lawsuitwas so particular about giving the FTC the
authority to do these things.
But the FTC claims this this authority underthose interpretations of the act, the lawsuit

(46:31):
says For the first time in its history, theFederal Trade Commission has issued a
sweepingly broad rule addressing worker noncompete agreements on a nationwide basis,
decreting that nearly every one of themconstitutes an unfair method of competition
under section 5 of the Federal Trade CommissionAct.
By the Commission's own estimates, thenoncompete rule will will retroactively
invalidate 30,000,000 contracts despite broadenforcement of those agreements under governing

(46:54):
state laws.
And by categorically banning noncompetes goingforward, The rule will impose huge costs both
on workers and on businesses.
Planups easily satisfy the requirements for anorder stating that noncompete's rule effective
primarily in joining the commission fromenforcing it or both.
First, plaintiffs are overwhelmingly likely toprevail on because the commission has no

(47:14):
authority to issue regulations prohibitingunfair methods of competition.
For decades, the commission has addressedunfair competition practices through individual
adjudications, applying standard antitrustprinciples to the facts of each case.
The convention now claims that a seldom usedhousekeeping provision of the FTC Act, Section
6 g, Actually grants a long dormant power,meaning they've never used it before, to issue

(47:34):
substantive rules declaring business practicesunlawful.
The text context structure and history ofsection 6 g, say otherwise.
And if there were any doubt, it would beresolved by the major questions doctrine, which
recognizes that Congress must speak clearly ifit wishes to assign an agency decisions of vast
economic and political significance.
We're gonna talk about major questions a littlebit more.
In a second, I wanna make sure I clarify thecompeting kind of interpretations of these

(48:00):
provisions.
So the FTC says all these provisions togetheract to give it this authority as the 7th
Circuit later put it, Congress considered thecontroversy surrounding the Commission's
substantive rulemaking power under section 6 gto have been settled by the Octane rating case.
And so they think that they have the authorityto make these substantive decisions, but I
think reasonable minds can argue certainly thatthey have not made substantive rule making like

(48:22):
this It was really more focused on that kind offalse advertising concept, before, both the
1975 and 1980 and NC Act does indicate theunderstood the commission possessed rulemaking
power under section 6 g and chose to leave thisauthority in place.
So the FTC says, okay.
6 g looks a little broad.
6 g looks like maybe we don't have theauthority to make these kind of determinations,

(48:44):
but we have in the past, and we're going tocategorize these particular kind of false
advertising complaints as substantiverulemaking.
And because Congress didn't take it away fromus, in fact, Congress kind of clarified that we
do have the authority to make policy, etcetera,with respect to unfair methods of competition,
then Congress could have taken this authorityaway from us.
They didn't.

(49:05):
Thus we have this authority.
The lawsuit says, no.
That's not how statutes work.
Congress didn't give you that authority in thefact that they have not otherwise taken in away
from you.
The authority that you don't have is notindicative of anything.
Right?
And you can see how reasonable wines can differon both of these things but that's why I wanted
to also talk to you a little bit about Yale.

(49:25):
This is the Yale journal on regulation.
This is an article entitled predicting the fateof the FTC's non compete ban by Daniel a Crane.
And as a full disclaimer here, I would say thatProfessor Crane, he is one of my professors.
Right?
He's a professor at the University of Michigan.
I took a class with him back when I was inschool, And and so I'm probably predisposed to,

(49:49):
value his writings on these topics.
But that being said, you can value it howeveryou want as we look at this particular
discussion of a number of lawyers and legalprofessionals on this topic.
So He writes, the FTC voted 3 to 2 to adopt afinal rule prohibiting non compete agreements
in employment contracts.
The 2 Republican commissioners dissented on avariety of grounds, including that the FTC does

(50:13):
not have substantive rulemaking authority under6 g, the major questions doctrine which we saw
referenced, that the rule is arbitrary andcapricious, in the non delegation doctrine.
And we'll talk about that one just a little bithere.
I wanna make sure we talk about most of them.
We talked about major questions.
That's essentially a new kind of doctrineintroduced by the Supreme Court, pretty

(50:33):
recently in 2022, that is a canon ofconstruction that bars agents from resolving
questions of vast economic and politicalsignificance without clear statutory
authorization.
So the Supreme Court in the United States hasbeen looking at statutes and saying, Congress
knows how to write to give you the authority tomake broad descriptions of things, and Congress

(50:53):
knows how to do this.
And if they don't, then you don't have thatauthority.
And so the Supreme Court has taken that up inthe last couple cases.
They might well bring it up again.
In this case, certainly, I think that banningnon competition provisions across the country
and making it effectively retroactivelyapplicable to existing non agreements that may
or may not have had consideration change handsis the kind of thing that is a major question

(51:18):
as the Supreme Court has described it, but It'ssuch a new kind of concept and new kind of
doctrine from the Supreme Court in and ofitself.
I don't think anybody can say for sure that anygiven court in the federal level will decide it
on these grounds.
It seems to apply, but it's so new that I don'tthink any lawyer would bet the house on it at
this point in time.
The other thing that we talked about in in thatlittle summary was non delegation.

(51:42):
For those of you that didn't go to law school,this is the concept that Congress cannot take
its legislative powers and give it to anotherbody.
Right?
So as we've talked about on this channel, asyou've seen on Twitter or social media,
wherever you're at, A lot of people look at theUnited States Congress as effectively broken
that they're not passing laws that people wouldwant.
They're not doing what they are supposed to bedoing.

(52:03):
And indeed, the legislative branch in theUnited States has long been, a a branch that
has been criticized for not doing exactly whatpeople want, etcetera, etcetera.
And so one of the things that we saw certainlyin the history of the United States is that
Congress had a tendency or desire to take itslaw making authority and say, you go handle it

(52:24):
other agencies so that we can't be blamed forwhatever it is that you come up with.
And there's a there's a long series ofprecedent in the United States.
It says the the legislative branch cannot justhand it over to either a future Congress or
another agency.
To go and figure these things out.
And so one challenge to this would beessentially at the core of the Federal Trade
Commission Act, that congress can't go anddelegate such a big substantive rulemaking

(52:50):
authority to an agency that's otherwise a partof a branch that doesn't write laws.
Right?
Federal Trade Commission is a part of theexecutive branch.
It is supposed to execute and enforce laws, notwrite them, and perhaps this violates that non
delegation doctrine by being so broad as to notbe contemplated by the original laws as written
by Congress.
And those are the those are the order of majorchallenges, to this.

(53:12):
You can see that Doctor Crane here went throughand talked to a bunch of his friends.
Hoeg will this all turn out?
I went shopping for predictions from scholarsof administrative law and antitrust law.
17 people answered roughly half from theadministrative law pool and half from the
antitrust pool.
Before getting to the outcomes, let me makeclear that this isn't anything like a
scientific study.
Think of this as me walking around a virtualfaculty lounge and asking people with expertise

(53:34):
for their off the cuff predictions.
In terms of potential bias, some respondentsexpressed sympathy for the rule, others
antipathy.
It seems like a pretty mixed bag, but I make nowarranties.
So caveat emptor.
Kevin Amtor here as well.
Buyer beware.
The question I asked to everyone was, is themost likely outcome of the challenge to the
rule struck down by the Supreme Court upheld bythe Supreme Court or never reaches the Supreme

(53:57):
Court for any reason, including the SupremeCourt doesn't want it, withdraw by a future
administration, etcetera.
Please then feel free to add any commentary,for example, explaining what doctrine the
Supreme Court would cite if it strikes it down,why it would uphold, etcetera.
This is this is meant to be a purely predictiveexercise.
Please try to be objective.
Responses may be quoted, but anonymously.
Right?
So you're talking about academics in lawschools and whatnot.

(54:19):
Making these kind of determinations.
And so we wanted to provide an anonymous,quoting here.
So you can take that with the grain of salt,but we have no reason to believe these quotes
were not actually made.
The results are lots of respondents took theliberty of budgeting my 3 categories, so I'm
not gonna try to report the results withnumerical precision lawyers.
Right?
But almost everyone thought the rule will bestruck down either by a Supreme Court or a

(54:40):
lower court.
If the if the nearly unanimous view was thatthe rule will be invalidated, there was less
consensus on the cause of death.
The major the major questions doctrine had agood deal of predictive support.
One respondent said Seems like a pretty routineapplication of the major questions doctrine as
to whether the FTC has the rulemaking power itclaims to have.
A concurring respondent observed that myrationale is that any agency rule making that's

(55:01):
a big enough deal to make the front page of theNew York times is likely to be invalidated by
the courts Obviously, that's not always gonnabe true, but it strikes me as a pretty good
rule of thumb for the current court.
And again, that's part of the discussion hereis the politics.
We obviously know that the court has been asinterpreted on the political spectrum, making
decisions on a more conservative basis, but ina lawmaking and kind of legal interpretation

(55:24):
way rather than looking at it as conservativeor liberal or republican or democrat, they have
been, a little bit more against theadministrative state's regulatory, abilities on
these things.
Right?
The major questions doctrine comes frombreaking down EPA Authority, for instance.
And so this is the kind of thing that we couldlook at and say, however we feel about this

(55:47):
rule, however we feel about the FTC act, Thereal politic is that the current Supreme Court
is unlikely to uphold it.
I think that's probably right.
Supreme Court will not disturb the FTC'sassertion of rulemaking authority because
despite its placement, Section 6 g is expressand broad and because the court will see
rulemaking as generally preferable toadjudication as a means of policy making.

(56:07):
However, Supreme Court will strike down therule on 1 of 2 grounds.
Either major questions, doctrine, because it isretroactive because the rule affects contracts
of 30,000,000 because contracts perceived to belargely a matter of state law or because
employment is not the FTC's wheelhouse.
They will say that that role belongs to theDepartment of Labor and the National Labor
Relations Board or constitutional avoidancebased on non delegation rounds, they'll

(56:28):
interpret unfair competition to include onlyproduct competition and, well, exclude
employment relationships.
Another respondent found the FTC's discussionof 6 g to be more persuasive than I thought it
would be.
That's the section that we accidentally read,earlier in this video.
But thought the court would invalidate byreference to the major questions doctrine, but
they might also fashion a separate clearstatement role that applies more specifically

(56:49):
to questions involving whether agencies mayengage in substantive rule making.
Yeah.
I do think there's a possibility, and this isone of the areas where reasonable minds can
differ on the political reasoning behind whatthe FTC does that the FTC could actually get
burned by president here with some kind ofcourt case.
It says when we see provisions like this thatsay for the purpose of carrying out the

(57:09):
provisions of the subchapter, that is anumbrella term used by Congress to essentially
allow you to facilitate the overall ambit ofthe authority that we've given you such as
directed to prevent persons from engaging inunfair methods of competition not to
substantively decide what we meant by all thewords that we used in our statute.
So I do think there's a real possibility theSupreme Court could look at this and say, no.

(57:33):
No.
None of the provisions that look like thisanywhere in our code are designed to give these
executive branch agencies the right tosubstantively rule make is the purview of the
legislature.
And to the extent of the Supreme Court of theUnited States might say that that would really
take the the fire out from the Federal TradeCommission's belly on these things.
I I think that that that is a potentialpossibility for the Federal Trade Commission on

(57:54):
this, and I think it's something that theyshould be worried about.
But clearly, the FTC is operated right now.
Is operated to stretch the boundaries of whatis, currently allowed under their statutes.
We saw that with the Microsoft transaction,attempted blockage.
We've seen that and other things that they'vetried to do in antitrust.
And we're seeing it here with this attempt toban non competition provisions.

(58:19):
Some respondents thought the exact grounds onwhich the Supreme Court will invalidate the
rule are uncertain even if the outcome isclear.
One respondent summed it up, the hard questionhere is probably not whether the FTC loses.
It's how it loses.
They explained that there are so many ways tochallenge the rule that the mind fairly reels.
Federal Trade Commission rulemaking authorityon constitutional removal pro protections, non
delegation, major questions doctrine, arbitraryand caprese standard that's the administrative

(58:43):
rule that says you're not allowed to just makerules that are arbitrary and capricious in
their application, plus the rules novelty makeit a right target.
Whatever you think about Lina Khan or the rule,she's thoroughly alienated conservative legal
elites who see the current FTC as an activistout of control agency.
Think you need to be a conservative to thinkthat the FTC is certainly operating in an
activist mindset, meaning that they are tryingto set new boundaries.

(59:05):
They are trying to establish more authority fortheir agency then perhaps existed historically
or at the time that their statute was enteredinto.
I think they aren't definitely activistswhether or not they're out of control.
I think it's gonna be a your mileage may varyproposition.
I don't think you really have to beconservative or liberal to see that they are
trying to push those boundaries.
The justice's constitutional and policysympathies are likely to be engaged here which

(59:27):
means they're like more likely to stretchexisting law to stop the rule.
The respondent did report provide some coverfor the FTC, Contrary to some of the doom and
gloom, I do see a narrow path for the FTC.
Non competes are not popular even with judges.
Many noncompetes arise from bargainingimbalances that seem well within the FTC's
purview.
The FTC's odds are bad, but I'd give them maybea 10 10% chance of winning.

(59:50):
So, Hoeg, you know, 10%.
So you're saying there's a chance says thisparticular legal commenter.
And so that's the situation as it stands rightnow.
Can the FTC do this?
Well, they have done it.
Are they going to stand up in court with thiswith with lawsuits on on the fly?
We see from this particular report in the yourthe Yale journal of regulation that it seems

(01:00:13):
unlikely that they will survive a challengehere.
So if you were thinking you can just tear upyour noncompete provisions.
I don't recommend it at this point in time, butreasonable minds can differ.
Nobody can actually predict what the spring theUnited States or really any court of the United
States will do with perfect authority.
So we've got a lot of different thoughts here.
I tend to think that it will fail this is an anoverreach by the FTC, but I've thought that for

(01:00:36):
a number of the things that they've done fromthe past few years, and it's going to take more
attempt I think, by them before they eventuallystop trying it.
I think the state of affairs is proof if morewere needed that competition policy is dead in
America.
If it ever had any meaningful effect, that thehope of meaningful oversight of harmful and ill
motivated business conduct is gone probably forthe balance of our lifetimes.

(01:00:57):
Good job, America.
So that's some commentators here for thisparticular article.
I think it's probably a little bit early to saythat.
Certainly, you can wait to say that until itgets struck down, but with the FTC moving in
this way.
I don't think that's the end of any meaningfulcompetition policy in America.
In light of my non scientific findings, here'sanother non scientific question.
Whatever else they may say publicly, do the 3FTC commissioners who voted in favor of the

(01:01:21):
rule have a different prediction about thelikely outcome in the courts.
In other words, do they think as most of thelaw props I pulled did that it's overwhelmingly
likely that the rule will be struck down, orare they making a different prediction either
because they know something I don't or becausethey're suffering from self serving bias.
And if they do believe it likely, the courtswill invalidate the rule, what's the best
account of why they're nonetheless goingforward with it?

(01:01:42):
They wanna do the right thing and be on theright side of history.
They wanna provoke Congress to give themrulemaking authority or pass a non compete ban
legislatively.
It's not certain that the rule will be struckdown and it's worth a try.
Something else.
And he says we're not likely to find the answerto that question anytime soon.
And, again, I did say this was a professor ofmine back at Michigan Law School, I believe.

(01:02:03):
So take my thoughts on this article withwhatever grain of salt you wanna apply there.
But I think these are all good questions.
I tend to think the FTC is acting to stretchthe boundaries of what authority it has on the
notion that they might get either a partial orentire win on one of these things and
essentially sees the ground that they didn'thave before all of these efforts were made.
Now do I think that's wise?

(01:02:24):
I don't.
I think they are in a judicial environment andeven a political environment that is suggestive
of them losing rights rather than gaining themby pursuing these particular actions.
But I'm not in charge of the FTC, andreasonable minds can differ as to what an
institution like the FTC should do when facedcurrent political environment and what the
ambit of their authority is ostensibly supposedto be.

(01:02:45):
So with that said, that's my opinion on thesevarious things.
That's the opinion of a bunch all professors onthese things.
What do you all think in the comments?
I do wanna grab a couple of super chats that Idid see fly by.
And thank you much for joining me on today'svirtual legality.
I hope this was helpful illuminating andeducational.
So first, thank you just because for giftingTown Hoeg memberships.

(01:03:06):
I really appreciate it.
Thank you so much.
I can't do this stuff without support fromviewers and listeners like you.
So all that support is appreciated, includingit in player and Patreon memberships and super
chats and all that.
Including super chat from Brit here, Hoeg byaccepting the super chat you agree to the
following contract.
You will never accept another super chat fromanother person without saying Brit is great.
This is the power of sticky contracts.

(01:03:27):
Sorry.
Not sorry.
Well, I have accepted the super chat because Ididn't otherwise go through any other
acceptance policy, is that a contract ofadhesion?
Is it something that I have to follow throughwith?
I would argue that it is not because I don'taccept separate consideration for the
particular agreement.
I accepted the consideration for, you know,publicizing and getting the super chat itself.

(01:03:49):
But if you wanna bring that to me in corporate,you're more than welcome to do so.
We can have that discussion further on.
Certainly, folks that look at non competeprovisions and, like, what Brit is saying here,
have a vested interest in acknowledging thatcontracts are often entered into, without equal
leverage.
And in fact, without even people reading them,before they agree to them.

(01:04:09):
Right?
So I I did, in fact, accept this super chatbecause Google doesn't give me the authority to
not accept super chats.
And that's its own kind of issue with one ofthese.
But, certainly, I am aware enough of thediscussion to say you can have a valid good
faith argument that non competition provisionsare too broadly entered into by companies that

(01:04:29):
the people that enter into them aren't in aposition of leverage with those companies and
that it is okay for various jurisdictions andpolicy Hoeg to look at them and say, no.
We need to impose some rules on these things oras in Cal that they are void on their face
because our public policy says that they are abad idea.
Now does that mean that the FTC act that weread through today gives the FTC the authority

(01:04:51):
to do that.
I think that is a different question entirely.
So alright.
Let's look at some of these comments here.
Newspin asked the question, Some federalemployees have similar employment restrictions.
IRS employees can't get paid for tax prep for acouple years after leaving the IRS.
Is this impacted by this new FTC rule?
I would argue that it would be, although Ithink you could definitely get into an argument

(01:05:12):
about whether they have purview over othergovernment agencies.
When you start bringing in the federalgovernment, acting in regulatory capacity over
other federal government bodies, you get intoother fights that are administrative law based
and that I do not have the proper research toget into in detail right here, new spin, but it
is a good question.
And I think with the breadth of how the FTCactually, kind of define what a noncompete

(01:05:35):
clause is, I mean, anything that competes withthe entity and workers to be everybody related
to the entity that it could be read thatbroadly, and it could present a problem for
another federal agency.
Alright.
So I I do think that that's the kind of thingthat might become a fight.
There are a lot of fights to be had here.
I only brought up one lawsuit.
I think there are 3 right now, but there willbe a lot of lawsuits and a lot of discussion

(01:05:56):
about whether they have the authority to dothis because it affects so many people.
And that made your questions, doctrine, mightwell be at the core of all this, which is to
say, can they enter into a regulation with onlyrulemaking authority, that affects 30,000,000
contracts that affects the entirety of theeconomy of the United States without a
legislative directive to do so, and the RUsthat they did get that directive that Congress

(01:06:20):
could have taken their authority away and theydidn't.
And the lawsuit says, no.
No.
Congress knows how to give you authority.
Would have given you these authority to look atnon compete agreements.
If they wanted to, they did not.
This is a this is a a political maneuver to tryto go get more power.
By the FTC.
And I really do believe that reasonable mindscan differ on these things.
On my side, I tend to think that this is astretch of what the FTC has historically done

(01:06:45):
and what they are attempting to do here.
But I understand why they focused on noncompetes first.
That's one area where Professor Crane asks atthe end of his article.
Why did they do it this way?
I think part of the answer there is in one ofthe questions that he got answered.
Which is to say non competes aren't aren'tloved by many people.
Right?
Even when I went out on social media when thisfirst happened, and said, in general, I'm in

(01:07:09):
favor of the freedom of contract rather thanthe regulatory body saying, no.
I had even friends come into my DMs and say,no.
Non competes are bad.
We hate them.
And they should have something done about them.
And so this is a good thing that the FTC isdoing.
And one of the things that happens with all ofthis stuff is that We can talk about first
principles.
We can talk about what the legislative branchis supposed to do.
We can talk about what they're not supposed todo at the executive branch.

(01:07:31):
But if somebody does something that you like, Alot of the times, people that are commenting on
these things, the the public discourse can beon your side, even if you aren't strictly
following the rules that are put in front ofyou, because people like to get things that
they like and like to have things that theydon't like stopped.
And that's just the simple kinda real politicof all this.

(01:07:51):
I understand that.
And certainly, I think that this was chosen bythe FTC because they knew that non competes are
disabled, not just by the courts, but by thepeople that have to sign these agreements with
non competes in them.
That there was going to be at least somepolitical backing for this move even if from a
purely legal analysis level, maybe don't havethe authority to do this as they've described.

(01:08:13):
Jenny's getting inky with it.
Thank you for the super chat, Jenny.
Do you think there's a happy media where whatpositions Tedra can be considered for non
compete is limited.
IE limit what positions are considered asrequiring a non compete and the time it lasts.
Yes.
I do, and I think the various states do that.
Right?
So if we're just talking about Michigan as a,for instance, you're only supposed to use non
competes for positions in companies that havesome access to that secret sauce, and I'm not

(01:08:37):
getting into the legal ease here because Idon't think it's important for this discussion.
But they have some access to that proprietaryinformation that can't otherwise be protected
very easily with a non disclosure agreement ora non disclosure provision.
And with that access, you still can only limittheir ability to compete with you to a
geography that's close to where they wereoperating, and for a short amount of time after

(01:08:58):
they leave your employee.
Right?
If you try a 5 year noncompete for the entirecountry.
That's gonna be something that the courts inMichigan are unlikely to enforce against that
worker on your behalf.
I do think there's a happy medium.
I think the common law and the judiciary ofthese various states have been working towards
that, but I also think that companies can betoo aggressive with these things and can pun

(01:09:18):
can put what are essentially unenforceableprovisions in contracts on the premise that
most people are going to try to be good lawabiding citizens are gonna try to abide by the
contractual commitments they sign their nameto.
And that even if it's technically unenforceablein a court of law, they can use that kind of
good nature of people that have worked for themto send nasty grams to use law firms and

(01:09:40):
lawyers to go and bully them in a way that thecourt system isn't used for because they
wouldn't enforce it themselves, but that a agiven worker isn't going to know it isn't going
to make sense to fight against because of thecost and logistical effort that the legal
system requires.
So And do you think there's a happy medium?
I think it should be publicized more about whatis it and what is not unenforceable in any

(01:10:03):
given jurisdiction.
I'm not sure that a blanket ban with noconsideration of what should be reasonable or
not is the right idea.
In fact, a lot of the commentary that weskipped that you can see being made to the see
is that, okay.
You can enforce some kind of rules around this,but there should be exceptions for senior
executives.
There should be exception for people that areright there making the IP for the company.

(01:10:24):
There should be limitations on geography andtime, but it shouldn't just be this kind of
blanket hammer cudgel against the entireconcept of non competition provisions.
And that's where the FTC is probably gonna getinto the most trouble with this.
But again, they are very aggressive in tryingto assert their authority in a lot of ways
right now in 2024.

(01:10:45):
So RJ formally, RJH00 says I've never heard offast food restaurants having non competes.
Why would they even do that unless it's purelyto harm the worker?
Apparently, this is a conversation in the chat.
Yes, this is the kind of thing where they areoverly aggressive.
Right?
You could say a company, like, let's call let'ssay Kentucky Fried And I have no idea whether

(01:11:05):
they have a, a non compete, but you know abouttheir their 11 herbs and spices.
Right?
And, you know, of all these conversations in IPland where the coke formula is kept by 13
different people or what have you, that if youare otherwise being told how this particular
company makes their chicken so delicious, thatyou might not necessarily want to have every

(01:11:25):
line worker and every teenager from the localhigh school have access to that without some
protections that it's not gonna be made toAlabama for Edge chicken next door.
Right?
And so you can have these conversations.
It would be a very specific fact pattern to getthat enforced by a court.
And it would be very difficult to do so becauseit is a minimum wage job, and you wouldn't
expect them to have access to that.
But, again, sometimes if you want to run thecompany in a competitive banner, you want to

(01:11:51):
have people have that more access tointellectual property.
You wanna run less like a vault or a bank.
And at the end of the day, that might be themost competitive is to have those protections
so that you can train employees to the maximumability so that you can be as competitive as
possible with whatever local restaurant youhave next year, and you can see how either side
can fight this from different perspectives andfrom different kind of incentive structures,

(01:12:14):
how the worker feels about it, how the companyfeels, how the other companies feel trying to
buy workers and their services.
And so I think this is one of those areas thinkit is likely to be struck down.
I think this is essentially a power grab by theFTC.
I think it is done so that they can potentiallykeep that regulatory authority in substantive

(01:12:34):
rulemaking for other things that maybe aren'tas politically well thought of, that the FTC is
trying to do here, but I do think it has a achance, a good chance, honestly, of blowing up
in their faces.
Which is what has happened with other FTCactions on the antitrust side of things as we
saw with Microsoft and we've seen in otherinstances.

(01:12:56):
Although says I'm thinking it may be a lawyerthat is using a boilerplate employment contract
for all their businesses, which includes anoncompete clause, that can also happen.
Right?
When you've got the lawyer that primarily doesestate planning, but knows that this employee
needs to have some kind of provision, to to toback them up and is doing an onboarding to help
their cousin or just because they need thework, you do have kind of a lesser

(01:13:18):
understanding of some of these more common lawprinciples And you have lawyers that specialize
specifically in labor law because this is oneof those areas that is fraught, in the United
States and other jurisdictions.
And so that can happen where somebody's justnot as keyed into some of the important stuff
here.
Sarah R.
Hoeg, I'm gonna be replaced crew, but I'm anhour behind due to internet issues where I am.

(01:13:40):
Wanted to express a concern about non competes.
Please note I've missed most of theconversation.
Sure, Sarah.
We will see what you have to say.
You can absolutely express a concern about noncompetes.
I understand that a lot of people don't likethem.
I also understand that I draft them, and Idon't have a specific perspective as to their
usefulness that maybe folks don't see, andthat's one of the reasons that I wanted to
discuss them with you.

(01:14:00):
But I also wanted to talk about the function ofthe executive branch, how the FTC operates, and
whether or not something that looks like abroad rule should give them the authority to
comprehensively rule make like this.
Rj formally rjh00 says My question, if thiswould apply to wrestling, wrestlers are
independent contractors and aren't allowed toappear on a competitor company before 30, 60,
90 days after they leave one company.

(01:14:22):
This provision, the the the ban that the FTCproposes would be covering these kinds of
things.
Yeah.
The difference between employees andindependent contractors is at least as asserted
by the FTC unimportant, and that if you areproviding services for a company, they are
allowed to enforce a noncompete against youafter the day that that rule were to go into
effect.
And for most wrestlers, as it stands right now,even if the rule doesn't go into effect for 4

(01:14:45):
months, if they entered into a non competeright now, it wouldn't be enforceable after
that rule went into effect, regardless becausethey aren't senior management of the company.
They aren't making policy decisions forwhatever company they are wrestling for.
Presumably, I'm guessing.
Right?
There might be a wrestler out there that helpsactually operate their league.
But based on what you've just described here,yes, this is the kind of thing that would be

(01:15:07):
prohibited, by the FTC.
Sarah R, I went to school for automotivetraining everything there.
I was recruited by a shop that had a noncompete.
This was 2008.
Automotive was hit hard by the recession waslaid off.
Could not work and ran into financial issues.
And, yeah, I think that's that's horrible,right, in certainly as a lawyer in Mid

(01:15:30):
Michigan, I am very familiar with theautomotive industry, and I'm very familiar with
the problems that we had in 2008, 2009, and I'mvery sorry to hear that.
Yeah.
I I think that's a problem.
Right?
Non competes can have that happen to the extentthat it prevented you from working entirely
that was probably an on compete that waswritten over broadly, but I can't speak to it
specifically without seeing the language andhow it might have been enforced and what roles

(01:15:53):
you had, etcetera.
So I think we can both agree that there aretimes when it makes a sense to have certain
provisions in place that prevent you from usingthe knowledge and training that you've got to
the detriment to the people that wouldotherwise pay for your knowledge and training
because if you don't prevent that, then thesecompanies and everyone else is gonna be less

(01:16:13):
likely to give knowledge and training to theiremployees.
That's gonna hurt the entire economy.
It's gonna hurt overall welfare.
In a manner that is in completely incongruouswith the notions of the Federal Trade
Commission Act, the notions of the antitrustacts to keep competition on the economy humming
with the ability of these companies to fightagainst each other for your dollar.

(01:16:33):
But certainly people can, in differentinstances, get burned by these things, and I'm
very sorry to hear that that happened to you.
And I can certainly understand why anybody thathas had that happened to them would look at
these and say somebody should come in and andban these things entirely, but I do think that
you can look at this and say there are reasonsfor these things to exist and there can be

(01:16:54):
reasonable restrictions on how they are used,but perhaps a blanket ban is a step too far.
Jenny's still getting inky with it.
And thank you, Jenny, for another super chat.
Are there ways the general public can holdthese agencies accountable for overstepping
their authority outside of lawsuits?
The general public would operate primarilythrough their state attorneys general, I would

(01:17:14):
say.
Like, if this initial, commerce lawsuit doesn'twork for whatever reason.
You might see it challenged by a coalition ofstates.
You've seen that happen before with respect torules and rulemaking.
And I would suspect that could happen againhere.
But that's generally how you would do it.
Right?
You don't have a private cause of action underthe administrative procedures act to go and

(01:17:36):
challenge the rulemaking authority.
If you're directly affected, you might be ableto, the general public of small businesses that
have non competes in place, could argue thatthey are damaged by having these things taken
away.
Like, I gave, as an example earlier in thisvideo, when I mentioned that you could have
paid consideration, considerable consideration,to someone for non compete provision that is
now no longer enforceable, and that could beseen as a kind of taking and you could be

(01:17:57):
damaged that way.
You could potentially have a lawsuit in thatmanner.
Against an agency like this, but it would bevery difficult.
You really bring these to the attention of yourgovernment agencies to handle for you.
And then in this case, the states haveattorneys general to to fight for their
constituents on matters like this.

(01:18:21):
New spin says, Sarah R, that's messed up.
I agree.
If you get fired, there should be a provisionto release you from the non compete.
I think the FTC is taking it too far.
But this is super problematic.
Yeah.
And there are versions of non competes and nonsolicitation provisions that essentially say if
you are let go, then this doesn't apply or itapplies differently.
Right?
The term becomes less or or what have you or orlines up with exactly your severance provision.

(01:18:43):
Right?
A lot of the times, one of the things that Ilike to do in executive agreements is is tie
severance in those concepts to whatever thelength of non compete is and have that
compensation kind of mirrored that process.
So as long as you're getting paid by us, youcan't compete with us that kind of thing.
And certainly different clients, differentcompanies, and different entities have
different approaches to this.

(01:19:03):
My advice to clients is always to keep itreasonable, really only try to protect what you
need to protect as to the investment thatyou're making in these employees and the access
that you're giving them to your trade secrets,but different companies can go too far.
And I think this is one of those areas wherethe FTC has the political backing that they
have because a lot of companies across thecountry went too far.

(01:19:25):
And because those companies went too far, thisis how we get into a situation like this.
It's very similar to bad facts, make bad law.
Right?
If you've got a defendant that you really hatebecause he's an asshole or what have you, in
court, you can get weird decisions.
You can get weird evidentiary procedures andthings like that because everybody thinks that
they're deserving of whatever is coming tothem.
And that can create bad precedence.
That can create bad situations because a lotisn't really supposed to be applied based on

(01:19:47):
whether or not you like the person or not.
So I agree that this is an issue, that islargely self created by various industries and
various companies.
And the FTC is looking at it from thatperspective, but that doesn't mean that the
United States Federal Congress has actuallygiven them the authority to handle it this way.
Latube subs.
Hoeg, law chief Soubs.
Thank you for the question.

(01:20:08):
The problem is that the main area which isabused is against those who can't afford to
litigate.
That's true.
What could be done for those clearly overbroad,but where the employees can't afford court.
Well, I think that when you look at places likelegal aid societies and other folks that might
be recommended by various state bars, these arethe kinds of things that those attorneys that
are otherwise usually pretty limited inexperience can handle.

(01:20:30):
Right?
The rules in whatever state you're operating inare generally pretty well known because there
are enough court cases that have been broughton these premises that you can look at this and
say, okay.
Well, if you're trying to enforce a 10 yearnoncompete provision, for the entire state of
Michigan for your tiny fast food restaurant inAnn Arbor, then we can go to a court and say,
your honor, we need to restrict this toWashington County or Ann Arbor or what have

(01:20:53):
you.
We need to only limit it to fast food.
We need to do various things to it, and thecourt will take a red line and help you out.
And that's not the hardest litigation to bringfor a legal aid society, and that's what I
would probably recommend for those kinds ofthings, but labor attorneys also handle these
things as well, and often do so on a kind ofdiscount is perhaps the wrong word, but

(01:21:15):
expedited basis in terms of legal costs forfolks that clearly need it.
And I am entirely against putting unenforceableterms in in my contracts.
I will advise my clients on these things,overall, but you don't not every lawyer is me,
not every client or my clients.
So I totally understand where the issue comesfrom, certainly.

(01:21:37):
Sarah R says she ended up leaving automotivealtogether because of this.
I don't blame you.
There are industries that can create problemslike this.
And I understand leaving, and I I don't I don'tblame you one bit.
And we have people in the chat saying swearjar.
Yes.
I did.
I I used a bad word.
Apologies for that.
But sometimes sometimes I do.

(01:21:57):
Got got got to, gotta use the languagesometimes.
This taggerret says here, It was like here inCaptain America say something spicy language,
you know, language.
I don't I don't mean to you, but I thought itwas appropriate for that particular usage, and
thank you everybody for being here in virtualreality.
I think I've gotten everything on the superchat side of things.
So I appreciate all of the support.
If anybody has any other questions that I havemissed, Let me know, or leave a comment in this

(01:22:23):
video.
Tell people we're having these conversationsbecause I love having them with you.
I love doing these things and and having theseconversations and talks on this channel.
And so please do let me know, and I will seeyou on the next one.
Virtual legality is a YouTube video series withaudio podcast versions presented as commentary

(01:22:47):
and for education and entertainment purposesonly.
It does not constitute legal advice and doesnot create an attorney client relationship.
If you have legal questions about the topicsdiscussed, please consult your own legal
counsel.

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