Noncompetes and other related restrictive covenants are important tools used by companies to protect trade secrets, customer relationships, the integrity of their workforces, and other recognized legitimate business interests. But they are also sometimes used for improper purposes. Spurred on by media accounts of those improper uses, state legislatures have been increasingly constricting the use of noncompetes and have recently started focusing on other restrictive covenants as well. They have been joined by Congress, the National Labor Relations Board General Counsel, and the Federal Trade Commission (FTC), which in 2024 issued a rule purporting to ban noncompetes and other restrictive covenants deemed to function like a noncompete. While the FTC’s rule will likely fade into history, the possibility that the FTC will bring enforcement actions against companies using noncompetes still looms large.
This program provides an update on evolving state and federal legislation, and potential federal regulatory efforts aimed at possibly narrowing the protections provided by noncompetes and other restrictive covenants.
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