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April 23, 2024

By: Salvatore G. Gangemi

Two days ago, the Federal Trade Commission (FTC) issued its “Final Rule” banning non-compete clauses in employment. Until now, the FTC never officially declared that such clauses constituted an “unfair method of competition.” The Final Rule seeks to upend centuries of state law governing the use of non-compete clauses in employment, including state laws that already limit or ban their use. The federal government’s encroachment into traditional state law is not necessarily unprecedented, but in this case, will likely fail.

Generally, the laws of most states will allow enforcement of a non-compete clause provided that it both protects a legitimate interest (e.g., confidential information and customer goodwill) and does not impose a greater burden than necessary to protect that interest. Other factors that determine the enforceability of a non-compete clause consider the impact on the employee and the public.

Read on for more information in this blog post.

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