We are calling your attention today to recent developments regarding noncompete agreements. The Federal Trade Commission’s Office of Policy Planning held a hearing this past Tuesday to reassure businesses about the forthcoming enactment of its rule which will make most noncompete agreements illegal. This rule is set to go into effect on September 4.
In response to concerns stemming from the business community, FTC staffers maintained that the noncompete agreement ban will not result in an outright ban on severance agreements or training repayment clawbacks. Specifically, they emphasized that employers will not be stripped of their intellectual property rights. This should certainly bring an element of relief to businesses that had been previously unsettled by the announcement of this regulation.
To recap, the FTC’s move towards the elimination of most noncompete agreements appears less severe than initially perceived. It will certainly reshape the landscape of employment contracts, but important legal tools remain at the disposal of businesses to safeguard their proprietary interests and investments.
For a deeper dive into this development, refer to the original reporting conducted by Corporate Counsel at Law.com.