MIT Sloan Management Review Article on What's Next for the FTC's Ban on Noncompetes?

The Federal Trade Commission’s ban on noncompete agreements in employment contracts faces legal challenges that may prevent it from ever taking effect.

This past April, the U.S. Federal Trade Commission (FTC) issued a rule barring most businesses from entering into and enforcing noncompete clauses against their workers, declaring such provisions to be an unfair method of competition.

If the FTC has its way and the rule takes effect — which seems unlikely, in view of a recent court decision discussed below — most employers will no longer be able to enter into noncompetes with any employee or other worker and will be barred from enforcing existing noncompetes against all employees except for some senior executives. Even if the noncompete ban does not take effect, business leaders should prepare for the possibility that the rule could have a lasting impact on how courts and state lawmakers evaluate noncompete provisions, with the possibility of more states implementing their own restrictions on noncompetes.

About the Author

Robert Frederickson is a partner in Goodwin’s Intellectual Property Litigation practice and cochair of the firm’s Life Sciences Disputes sector. He represents life sciences, technology, and financial services companies in intellectual property litigation and complex commercial disputes.

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