Lawyers: Noncompetition agreement ban faces uncertain future
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On the issue of noncompetition agreements, it is back to the drawing board for the Federal Trade Commission thanks to a resounding defeat in the court system that nixed a rule set to take effect last month.
Yet, a return to the status quo ante seemed to come as no surprise to employment attorneys in the Carolinas.
“My sense at the time was that the proposed rule was going to get knocked down,” said Will Oden III, a North Carolina lawyer for Ward and Smith in Wilmington. “My personal opinion was that the FTC does not have the rulemaking authority to take the action that they took.”
A late August ruling by Judge Ada Brown, of the federal Northern District of Texas, arrived at a similar assessment and effectively killed — at least for the moment — the FTC’s attempt to ban most noncompete covenants, a longstanding but sometimes controversial condition of employment for millions of American workers — particularly those in high-skilled or managerial roles.
As the FTC mulls its next move, attorneys in North Carolina and South Carolina say that the chances for its proposed ban in the higher courts seem dubious at best but also stress that noncompetes might still face challenges and shouldn’t be overused as a one-size-fits-all solution.
Implement but not interpret
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