Last week, the Federal Trade Commission held a public workshop in which it made clear that while it will not seek to ban noncompete agreements outright, it remains committed to aggressively targeting “abusive” noncompete provisions on a case-by-case basis under federal antitrust law.
To this end, the FTC stated that it will evaluate whether restrictions are narrowly tailored to protect legitimate business interests such as confidential information, trade secrets, and customer goodwill (without overreaching), and with particular scrutiny on how such agreements may be used with respect to lower wage workers and those employees in the healthcare industry.
To reduce legal risk, employers who have not recently conducted a comprehensive review of how they utilize noncompete (and related restrictive covenant) agreements should promptly do so to ensure they remain in compliance with ever evolving applicable laws and government scrutiny.