FTC Ready to Attack Non-Compete Clauses in Employment Agreements this Year?

A non-compete agreement or clause is an agreement between an employer and employee that, following termination, the employee is restricted from working for any company for a specified time, in a geographic area, that is a possible competitor. Businesses use this clause so that the Employee may not take confidential or trade secret information or business methods to a competitor who is willing to provide a larger salary to the employee. So, will the FTC try to eliminate this type of employment clause? Most likely, they will try – how do we know that? Because the FTC held a two-day workshop titled “Making Competition Work: Promoting Competition in Labor Markets.” They promoted the workshop as a “fact” finding tour for addressing “competition issues affecting labor markets and the welfare of workers.” The focus of the workshop was post-employment obligations and restrictive covenants, including non-compete agreements. It has been our experience that each FTC workshop is less about finding facts and more often a warning that enforcement actions are coming.