New FTC Rule

Non-Compete Agreements

Does it Reach NDAs, TRAPs and Non-Solicitation Agreements (Maybe)?

People have begun to ask me about the new FTC rule on non-compete agreements. While the final rule is only 8 pages long, the total final rule publication is some 570 pages. Within those pages is the Commissions comments with regard to what a non-compete is. The important questions remain are to what extent does this rule apply to non-disclosure agreements (NDA’s), training repayment agreements, and (TRAP) non solicitation agreements. All of these are discussed in some detail in the final rule it's comments and supporting information. The simple answer is anything that has the functional equivalent of a non-compete is intended to be prohibited by this rule. But the inquiry must be fact based, and the is not simply. If you have existing non-solicitation agreements, NDA and TRAP, you will need to evaluate them in light of the commission comments and evaluation.