The FTC’s Non-Compete Ban: What Lies Ahead?
ABA Antitrust Law Section, 2024
Analysis Group Vice President David Toniatti, Manager Olivia Althans, and Analyst Georgina Scoville have published a recap of the American Bar Association (ABA) webinar “The FTC’s Non-Compete Ban: What Lies Ahead?” on the ABA’s Antitrust Law Section website. Moderated by Clay Everett (Morgan Lewis) and organized by Analysis Group staff, the panel included Analysis Group Managing Principal Jee-Yeon Lehmann, Cari Jeffries (California Department of Justice), Heather Burke (White & Case), and Koren Wong-Ervin (Jones Day). The authors summarize a discussion that focused on the recent nationwide non-compete ban announced by the Federal Trade Commission (FTC), covering topics such as the FTC’s authority to institute such a ban, the interaction between a federal ban and existing state restrictions, and practical takeaways for advising employers navigating the ban.
Ms. Burke and Ms. Wong-Ervin discussed the FTC’s authority to promulgate rules and regulations protecting competition and addressing unfair business practices. Ms. Jeffries compared the ban to existing state non-compete laws, and Dr. Lehmann provided an economic perspective on the short- and long-term impacts of the proposed ban based on available empirical evidence from academic literature on non-compete agreements and public comments submitted to the FTC. Ms. Wong-Ervin highlighted an exception to the FTC’s ban on non-competes in the area of M&A, noting that the FTC allows non-competes when necessary to protect the value of a business being sold. The discussion concluded with the panelists looking ahead to how employers could navigate the ban, with Ms. Wong-Ervin explaining that the ambiguity of the ban’s practical implications creates more work for employers and encourages them to prepare alternative provisions.
Authors
Toniatti D, Althans O, Scoville G