The Federal Trade Commission (FTC) has filed at least three administrative complaints in the last year challenging transaction-related noncompete agreements. These actions have important ramifications that antitrust and M&A practitioners must be aware of when drafting such agreements.

Noncompete agreements are quite common and generally enforceable so long as they are reasonable in scope and necessary to protect a legitimate business interest. Yet the FTC alleged that noncompete agreements entered into as part of three separate transactions violated the antitrust laws—namely the FTC and Clayton Acts. Of note, a senior representative at the FTC wrote that while many practitioners assume noncompete agreements are enforceable when they are ancillary to a legitimate business transaction, the FTC nonetheless will evaluate non-compete agreements to ensure they are not overly broad. The FTC’s most recent challenges show that no agreements are immune from scrutiny even when a deal is closed or the transaction value is relatively small.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]