On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 in favor of banning noncompete clauses. The FTC first proposed the Noncompete Clause Rule on Jan. 19, 2023, under sections 5 and 6(g) of the FTC Act. GT previously covered the FTC’s request for comments.
The enforceability of restrictive covenants, particularly non-compete agreements, can be very difficult for employers to navigate, especially for companies in their “start-up” phase. Technology companies in particular face challenges in structuring non-competes that balance their need to attract talent with their need to protect confidential and sensitive information, while preventing unfair competition by former employees.
The Massachusetts Noncompetition Agreement Act, M.G.L. c. 149, § 24L, has been the law of the Commonwealth for almost four months. The statute only applies to agreements entered into between employers and certain employees and independent contractors on or after Oct. 1, 2018, so the law’s ramifications are still largely yet to be determined. Nevertheless,