Wilson Elser partner Diana Estrada, experienced in litigating matters arising under all aspects of federal and state employment laws, takes a deep dive into the recently passed Federal Trade Commission (FTC) Noncompete Clause Rule. Author of the Employment & Labor Practice's newly issued white paper FTC Ban on Post-Employment Noncompete Agreements: How did we get here and what happens next? Diana launches an in-depth examination of the new rule, including exceptions and alternatives to noncompete agreements. Importantly, she notes that although the new rule may not withstand legal scrutiny, states are becoming more and more hostile toward noncompete provisions and are legislating to limit them while the National Labor Relations Board continues to scrutinize their use.
The white paper accordingly includes a caveat for employers to work closely with counsel to consider how they will navigate new laws that may render their current noncompete agreements null and void. This process should include a thorough review of current agreements and policies to determine whether the terms are still enforceable and how such agreements or policies may be revised or replaced with alternative forms of protection, including specifically tailored confidentiality agreements.
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