Court Strikes Down FTC Ban on Noncompete Agreements

Continuing to keep you updated on the noncompete status in a blog we posted several months ago, a federal judge has  tossed the Federal Trade Commission’s (FTC) ban on employee noncompete agreements.

Judge Ada Brown stated that employer violations are “typically decided through case-by-case administrative adjudication” This means that the FTC can still bring complaints/legal actions against companies that require noncompete agreements on the argument that they violate federal law. This has always been the case.

By trying to tie all noncompete agreements with such a broad ban, the FTC tried to get around the case-by-case route, which is expensive and time consuming - and with an individual victory would not bind non-parties.

We also recommend that now is a good time to have your legal counsel review your noncompete agreement to be sure it meets the current regulations and to be sure it is not in the outside perimeter of what is legally acceptable.

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