Earlier this month, President Joseph Biden issued an Executive Order encouraging the Federal Trade Commission (FTC) to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”

We joined more than 50 lawyers and paralegals around the country – all of us experienced restrictive covenant practitioners – in signing a joint letter urging the White House and the FTC to exercise caution in regulating non-compete agreements.

Drafted by our friend Russell Beck of Beck Reed Riden LLP, with input from us and some of the other signatories, the letter describes the long-recognized benefits of reasonable non-compete agreements and other restrictive covenants, particularly protecting valuable trade secrets from misappropriation. Indeed, non-compete agreements have been enforced as valid and reasonable in most states for hundreds of years. The letter also dispels common misconceptions about non-compete agreements, including the idea that all non-competes are necessarily abusive to employees.

While taking no position on whether the FTC legally can regulate this area of law, we suggest the FTC act judiciously, if at all. For example, rather than issuing a complete ban, the letter proposes the FTC consider prohibiting non-competes for low-wage workers only and require that employers give advance notice of non-compete provisions to employees before requiring them to agree. We believe that more modest regulations can be designed to balance competing interests of employers and employees, especially in light of the state-specific legislation, common law history, and the very capable job courts have done to enforce what is reasonable under the facts of the cases presented.

We will continue to monitor these regulatory developments. In the meantime, employers should consider taking proactive steps to protect their interests. Attorneys in the Restrictive Covenants, Trade Secrets and Unfair Competition practice group are available to advise on these issues.

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Photo of Clifford R. Atlas Clifford R. Atlas

Clifford Atlas is a Principal in the New York City, New York, office of Jackson Lewis P.C. He is the Co-Leader of the Non-Competes and Protection Against Unfair Competition Practice Group.

Mr. Atlas works extensively with clients in developing and drafting employment contracts…

Clifford Atlas is a Principal in the New York City, New York, office of Jackson Lewis P.C. He is the Co-Leader of the Non-Competes and Protection Against Unfair Competition Practice Group.

Mr. Atlas works extensively with clients in developing and drafting employment contracts and restrictive covenant agreements, and developing programs to best protect clients’ confidential business information. He has significant experience in prosecuting as well as defending actions involving breach of non-competition and non-solicitation agreements, employee raiding, misappropriation of confidential information, tortious interference with contract, unfair competition, and related business claims. Mr. Atlas also has assisted clients in employment issues arising from corporate transactions.

Additionally, Mr. Atlas handles all types of employment discrimination, harassment, disability, wrongful discharge, and related employment tort, contract, wage-hour and employee benefits claims. He has tried cases in state and federal courts, and before administrative agencies. Mr. Atlas has argued numerous appeals to the United States Court of Appeals for the Second Circuit.

Mr. Atlas joined Jackson Lewis in 1985.

Photo of Erik J. Winton Erik J. Winton

Erik J. Winton is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He is the Co-Leader of the firm’s Non-Competes and Protection Against Unfair Competition practice group. His practice focuses on restrictive covenant drafting, counseling, litigation avoidance and litigation. He…

Erik J. Winton is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He is the Co-Leader of the firm’s Non-Competes and Protection Against Unfair Competition practice group. His practice focuses on restrictive covenant drafting, counseling, litigation avoidance and litigation. He regularly provides valuable counsel to clients in New England and across the country regarding these issues.

Mr. Winton has extensive experience as a litigator, including successful first chair jury trial experience. He represents employers in federal and state courts and administrative agencies in matters involving discrimination claims based on race, sex, sexual preference, national origin, and disability; retaliation, whistle blowing, wage/hour claims and Department of Labor complaints; allegations of wrongful discharge and breach of contract under the common law; and claims for tortuous injury, such as defamation, infliction of emotional distress and interference with advantageous relations. Mr. Winton has prevailed on the vast majority of dispositive motions filed on his clients’ behalf, including several reported cases.

Mr. Winton’s practice emphasizes advising employers regarding how to comply with the full range of federal and state labor and employment laws. This includes advising clients on issues relating to disability and leave management, reductions in force, wage and hour laws and workplace safety. Mr. Winton also drafts and negotiates executive employment and severance agreements on behalf of both employers and executives.

Mr. Winton speaks frequently regarding employment law issues. He joined the firm in 2000 after five years as a litigator at Fitzhugh & Associates (now Fitzhugh & Mariani, LLP), a litigation boutique with offices in Boston and Hartford, Connecticut. While attending law school, he was on the staff of the Cardozo Arts & Entertainment Law Journal.