Erin Barker and Natalie Sanders Pen “Non-Compete” Rule Update for North Carolina Lawyers Weekly

Brooks Pierce attorneys Erin Barker and Natalie Sanders published a detailed article in North Carolina Lawyers Weekly outlining the Federal Trade Commission’s (FTC) proposed rule updates regarding non-compete agreements between employers and employees. In “The Tide is Turning Against Non-Competes,” they examine the shifting legal landscape for agreements at employment termination on both the federal and state levels.

Barker and Sanders explain that for the last decade, several states have been enacting laws that significantly limit or prohibit the use of non-competes. They point out that in January, immediately after finding three employers’ agreements “constituted an unfair method of competition” and violated the FTC Act, the commission proposed a broad rule prohibiting non-competes by all employers.

The authors also explain that new legislation regulating the use of non-compete agreements, the Workforce Mobility Act (WMA), has been introduced in both the U.S. Senate and House of Representatives and contains provisions to soften the FTC’s proposed changes.

“In contrast, and perhaps as a signal of where the FTC may land after it considers comments to its proposed rule, the WMA does not require employers to rescind prior agreements and it allows broader use of non-competes in the sale of a business context,” they write.

Barker and Sanders emphasize that the FTC rules have not gone into effect and the public commentary period is still open. They also cast uncertainty as to the WMA’s likelihood of becoming law and the final strength of the FTC’s proposals. The attorneys offer a series of useful tips for employers to use in the meantime. 

The full article can be found here.