Prep for Noncompete Ban

Joshua A. Hawks-Ladds co-chair of the Labor, Employment Law and Employee Benefits practice at Pullman & Comley authored an article for Providence Business News focusing on the Federal Trade Commission's (FTC) final rule that would prohibit virtually all employee non-compete agreements.

Titled "Prep for Noncompete Ban," the article outlines the FTC rule, its potential legal challenges∗, and implications for employers. "The rule defines a noncompete clause as a 'term or condition of employment' that 'prohibits,' 'penalizes' or 'functions to prevent' an employee from finding work with another employer after completing employment." Josh writes. "According to the rule, the 'term or condition of employment' can include a contractual term or workplace policy and doesn’t necessarily have to be written."

Josh recommends that despite several legal challenges that may affect the ban going into effect in September, employers should still ensure that their restrictive covenant agreements will pass a legal test.

∗ Note: On July 3, 2024 a Texas federal judge issued a preliminary injunction against the FTC rule banning noncompete agreements; this article does not reference that development as it was written before that preliminary injunction was issued.

To read the full article, please visit the Providence Business News website.