BLOG

Thoughtful Insights On The World We Live In

non-compete

Protecting Your Business in Light of the Federal Trade Commission’s Proposed Ban on Non-Competes

When you own a business, you are only as protected as your trade secrets are. That is why you should pay close attention to the Federal Trade Commission’s (FTC) recent proposal to ban non-competes in most contracts. On January 5th, the Federal Trade Commission (FTC) issued a Notice of Proposed Rulemaking that, if implemented, would functionally prohibit any employer in the United States from entering a non-compete clause with their workers.

For decades, non-compete agreements and provisions have been a cornerstone of business security, ensuring that employers and business owners are not subject to their trade secrets being circulated without their consent. However, in recent years the practice of entering into non-compete agreements has come under broad scrutiny, leading to conditional prohibitions of the agreements in states including Maryland and Oregon and full bans in states including California and Oklahoma.

The FTC’s newest proposal will take these limitations further by imposing them on all businesses throughout the United States. Should it go into effect, it will not only prohibit non-competes from being enacted, but it will nullify any existing agreements and require businesses to issue formal letters of rescission to all impacted employees. This applies to current and former employees who have been bound by a non-compete agreement.

Though unlikely, even if this proposal is thrown out, we recommend that businesses and employers find and utilize alternative protective measures to limit reliance on non-compete agreements. The continuing increase in scrutiny of non-compete agreements is predictive of an impending invalidation of those agreements, whether now or in the near future.

It is imperative that businesses make plans and create systems outside of non-competes for protecting company information, especially in the case of employees transitioning out of the business. Contact us today to ensure you are best equipped to protect your trade secrets and business interests.

Related

Top 6 Items International Companies Should Consider Before Doing Business in the USA

Expanding your business into the USA can be an exciting opportunity but comes with challenges. For international companies, especially those from India, it’s crucial to understand the complexities of the American market to ensure a successful venture. At Bagchi Group, we offer a specialized USA Market Discovery service designed to provide comprehensive insights and strategic analysis. Here are the top six items you should consider before making your move:

>>

Spotlight on Lucha: A Story of Resilience and Community

n the heart of the South Bronx, a unique wrestling program has given rise to incredible athletes and inspired a compelling documentary, “Lucha.” This film captures the journey of a group of young women who, against all odds, found strength, community, and hope on the wrestling mat. Today, we are excited to share the story behind “Lucha” and its incredible impact on the lives of these young athletes and their community. We sat down with Josh Lee, a wrestling coach and one of the key figures behind this inspiring documentary.

>>

Understanding the FTC’s ban on noncompete clauses and what this means for your business

The Federal Trade Commission (FTC) has recently formalized a rule that will alter the landscape of noncompete clauses in employment…

>>

Corporate Transparency Act: An Essential 2024 Update

The Corporate Transparency Act (CTA) mandates domestic and foreign entities operating in the United States to report key details about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).…

>>

A Startup Conversation: Jim Roberts on Cultivating Entrepreneurship in Wilmington

Jim Roberts was the Founding Executive Director of the UNCW Center for Innovation and Entrepreneurship incubator and is the founder of the Network for Entrepreneurs in Wilmington (NEW) as well…

>>

Brand Protections and The Importance of A Fanciful Trademark

In the fast-paced and competitive world of business, your brand is everything. It represents your company’s identity, values, and products or services. As a law firm specializing in intellectual property…

>>

THE LATEST

Top 6 Items International Companies Should Consider Before Doing Business in the USA

Expanding your business into the USA can be an exciting opportunity but comes with challenges. For international companies, especially those from India, it’s crucial to understand the complexities of the American market to ensure a successful venture. At Bagchi Group, we offer a specialized USA Market Discovery service designed to provide comprehensive insights and strategic analysis. Here are the top six items you should consider before making your move:

Spotlight on Lucha: A Story of Resilience and Community

n the heart of the South Bronx, a unique wrestling program has given rise to incredible athletes and inspired a compelling documentary, “Lucha.” This film captures the journey of a group of young women who, against all odds, found strength, community, and hope on the wrestling mat. Today, we are excited to share the story behind “Lucha” and its incredible impact on the lives of these young athletes and their community. We sat down with Josh Lee, a wrestling coach and one of the key figures behind this inspiring documentary.

Understanding the FTC’s ban on noncompete clauses and what this means for your business

The Federal Trade Commission (FTC) has recently formalized a rule that will alter the landscape of noncompete clauses in employment…

Contact Us

Let's challenge the default together