Non-Competes: Reversal of FTC’s ‘Sledgehammer’ Approach Brings Welcome Relief

FTC would be “foolish” to appeal decision that halts controversial ban across the US | Texas district court ruling called ban “arbitrary and capricious” | Decision “gives IP owners a breather” as commission’s plan continues likely path to SCOTUS.

A Texas district court has blocked a controversial rule that would see non-compete agreements for approximately 30 million workers banned nationwide.

Willie Stroever, co-chair of the IP practice at Cole Schotz, said the block “gives IP owners a breather, as they can continue to rely on non-competes consistent with their applicable state law.”

Due to the possibility of an appeal, Stroever advised businesses take the time to make sure they have overlapping and alternate forms of trade secret protection such as physical security measures, electronic security measures, and employee training, among others.

“It is also a good opportunity for businesses to revisit employee agreements containing their trade secret protections to see if those agreements can be more narrowly tailored in case some form of non-compete ban returns,” he suggested.

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