Post-employment restrictive covenants, once viewed as near fortresses to protect proprietary information, customer and employee relationships, and competitive advantage, are now under heightened scrutiny. Non-compete agreements, in particular, have faced challenges from state legislatures and the Biden administration.

In April 2024, the Federal Trade Commission (FTC) voted to ban all non-compete provisions in employment agreements, broadly interpreting related provisions as de facto non-competes, including forfeiture-for-competition clauses— agreements in which an employee agrees to condition the receipt of a payment or benefit from their employer on their agreement not to compete after their employment ends. The FTC ban faced immediate legal challenges, resulting in the rule being “set aside” by a Texas federal court.