Noncompete agreements are often included in ownership or shareholder agreements to prevent someone from taking employees, proprietary information, and clients with them if they leave the firm. They are also routinely used in acquisitions of other firms. The FTC argues that such agreements suppress wages and prevent entrepreneurs from starting new businesses. Several states have already banned or restricted the use of noncompete agreements. If the FTC publishes a final rule, it is expected to be swiftly challenged in court.

After attending this session, participants will:

• Understand what is in the FTC proposed rule
• Learn about other restrictive covenants, such as non-solicit and non-disclosure agreements, that the FTC might consider the equivalent of a non-compete
• Understand the rule making process and why a final rule is vulnerable to legal challenge
• Discuss approaches to protecting proprietary information and clients if the ban on noncompete agreements is enacted and upheld in court

Presenters: Andrew Kilberg and Jason Schwartz, Gibson Dunn