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Federal Action on Noncompetes Should Not Forestall Connecticut Legislation
Regulatory action by the federal government will not repair the quagmire of Connecticut noncompete law.
January 24, 2023 at 02:02 PM
4 minute read
CommentaryWe have previously decried the "mess" that is the law of noncompetition agreements in Connecticut, with the enforceability of any particular noncompete "rest[ing] not on any clear vision of the substantive legal doctrine or its predictable application to the evidence, but on which Superior Court judge happens to draw the case."
On Jan. 5, the Federal Trade Commission proposed a new rule that purports to fix all that by effectively prohibiting postemployment noncompetes nationwide. The ban would be far-reaching: it would prohibit not only self-styled noncompetes, but also "de facto" noncompetes, such as broad nondisclosure or customer nonsolicitation agreements; it would apply regardless of geography, industry, or employee income level; and it would apply retroactively as well as prospectively. (The only real exceptions would be for franchise agreements and agreements ancillary to the sale of a business.)
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