Erik W. Weibust, Member of the Firm in the Litigation & Business Disputes and Employment, Labor & Workforce Management practices, in the firm’s Boston office, was quoted in Law360, in “Takeaways from the FTC's Noncompetes Ban,” by Bryan Koenig. (Read the full version – subscription required.)
Following is an excerpt:
The first legal challenges to the Federal Trade Commission's new ban on essentially all noncompete agreements that employers impose on workers have already been filed, but questions remain, not just on the rule's legal viability, but also on the likelihood of follow-on rulemakings and the rule's exact reach.
The final rulemaking, set to go into effect 120 days after its Federal Register publication, has already drawn at least two lawsuits in Texas federal court, from tax services and software company Ryan LLC just hours after the Democratic-majority FTC voted 3-2 along party lines to approve the ban Tuesday, and the next morning from the U.S. Chamber of Commerce. …
The lawsuits demonstrate that the rule, which the FTC estimates would directly affect roughly 30 million Americans working under a noncompete and would increase the average workers' annual income by $524, faces a tough road ahead. …
But attorneys said the rule is still unclear and could engender a glut of litigation to test the bounds of the regulation. …
Epstein Becker & Green PC trade secrets attorney Erik W. Weibust suggested the ambiguity is intentional.
"The FTC wanted to give itself space to enforce the rule … in a broader manner" than it actually drafted, Weibust said, arguing that the rule has "a huge hole" that could target nondisclosure agreements, non-solicitation language and requirements to pay back training expenses, if the FTC decides they are too broad or too onerous.
