Category: Employee Mobility and Restrictive Covenants

The U.S. Federal Trade Commission (FTC) recently issued a notice of proposed rulemaking that would dramatically change the playing field for employers who have post-employment non-compete agreements with employees or have a practice of requiring such agreements as a condition of employment. The FTC’s proposed rule is open for public comment until March 20, 2023. Whether the FTC’s proposed rule (once finalized) will survive legal challenges is a hotly debated topic among members of the legal community, many of whom believe that Congress did not clearly empower the FTC with the authority to enact such a broad rule, and therefore the rule will not survive given the U.S. Supreme Court’s 2022 decision in West Virginia v. EPA.

Continue reading “Non-Competes Will Continue to Be Under Attack in 2023”

The Federal Trade Commission announced that it will hold a virtual public forum on Thursday, February 16, 2023, to address its proposed rule on the use of non-competition agreements, as well as certain non-solicitation and non-disclosure agreements. The purpose of this forum is to examine the proposed rule and provide an avenue for individuals, including both employees and employers, to voice their opinions and discuss their experiences with non-compete agreements.

Continue reading “FTC Seeks Feedback on Proposed Rule on Use of Non-Competition Agreements”

The Federal Trade Commission announced a proposed rule that would, if adopted, ban the use of employment-based non-competes and require employers to rescind existing non-competes. The FTC’s proposed rule would reshape large segments of the American economy and supplant numerous recently enacted state statutes restricting the permissible use of non-competes and other restrictive covenants. If the proposed rule becomes effective, employers will need to consider alternatives to protect customer and employee relationships, and confidential information.

Continue reading “FTC’s Proposed Rule Banning Employment-Based Non-competes”

2022 was a relatively quiet year in terms of noncompete developments.  However, both state legislatures and courts continued to take steps to narrow the circumstances under which noncompetition and employee non-solicitation agreements may be enforced.  As such, employers remain well advised to continue to:  (1) be selective in identifying those categories of employees required to sign noncompete agreements; (2) rely on choice of law and venue provisions as allowed to maximize the chances of enforceability; (3) keep a keen eye on statutory developments; and (4) avoid no-poach agreements with other employers.

Continue reading “Top Noncompete Developments of 2022”