Worried About FTC Crackdown On Noncompetes? Start With Assessing Your Existing Contracts

A proposal by the FTC to ban noncompete agreements in employment has been widely criticized by business groups, with the U.S. Chamber of Commerce threatening a lawsuit if it goes into effect. But, as Seyfarth Shaw's Robert Milligan discusses, the potential noncompete ban is just the latest in the agency's self-described crackdown over what it views as unfair labor practices, so companies need to take a clear-eyed look at their contracts.

In early January, the FTC published a proposed rule that would ban all noncompete agreements between employers and workers - broadly defined to include employees, independent contractors, interns and others. If adopted, the rule would bar both prospective and existing noncompete agreements. Around the same time, the FTC took legal action against three companies and two individuals, forcing them to drop noncompete restrictions.