(L-R)Nicholas Pappas and Krista Bolles, Dorsey & Whitney. Courtesy photos Developments in the Laws Governing Noncompete Agreements
"Employers should review their noncompete agreements and assess whether they are necessary to protect legitimate business interests, such as confidential information or goodwill," write Nicholas J. Pappas and Krista Bolles.
October 03, 2024 at 12:00 PM
9 minute read
Employers who wish to enter into noncompete agreements with their employees breathed a collective sigh of relief on Aug. 20, 2024, when a federal district court struck down the Federal Trade Commission's (FTC) new nationwide ban on noncompete agreements (the Noncompete Rule or Rule). Although for now the Federal Trade Commission Act does not prohibit the use of noncompete agreements, employers should be vigilant in seeking to comply with other federal laws and the laws in all 50 states which continue to govern the enforceability of noncompete agreements.
In this month's column, we will analyze the court's decision striking down the Noncompete Rule and provide a brief overview of the patchwork of state laws that apply to noncompetes. We will conclude by offering some practical suggestions for employers who wish to use noncompete agreements for their workers in compliance with law.
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