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Photo of attorneys E. Kelly Conway, Michael E. Gehring and Stephen G. Harvey

The FTC is exploring a federal ban on non-compete agreements

On Behalf of | Feb 20, 2023 | Business Disputes

The news that the Federal Trade Commission (FTC) is exploring a ban on non-compete clauses in the public sector and private sector alike recently sent shockwaves through the American business community. 

Non-compete agreements currently serve as vital protections against the risks that employees will take what they’ve learned at a company and turn right around to use that knowledge against their former employer. 

By banning these agreements, companies will need to find new ways to safeguard their intellectual property and competitive edge in their respective marketplaces and industries. As legal protections for corporate interests are already notoriously complex, the idea of having to shore up a company’s safeguards in new – and inevitably more complex – ways is a reality that few in the business community are excited to entertain. 

Looking forward to the role of non-compete agreements

The proposed ban on non-compete agreements understandably has many in the business community concerned about sufficiently protecting their interests moving forward. It is worth noting that mounting resistance to the proposed ban may result in its defeat. However, even if this ban does go into effect, there are other ways that companies and legal counsel can work together to safeguard important business interests. 

By being as proactive as possible, companies can implement multi-layered strategies designed to protect trade secrets, lawfully suppress unreasonable competition risks and ensure that employee disloyalty doesn’t lead to ruin. The proposed non-compete agreement ban is certainly a cause for concern but it shouldn’t serve as cause for alarm.