For Professionals: Navigating Non-Competes -- Understanding the New FTC Ruling and its Implications

View the complete show notes for this episode.

The Federal Trade Commission (FTC) has issued a new ruling (as of May 2024) regarding the enforceability of non-compete agreements. This ruling will impact every business, regardless of industry, so attorney Darshan Kulkarni joins M&A Talk to discuss the legal and economic implications of this controversial decision. He highlights how employers and attorneys can handle this situation, discusses the potential effects on employees and the legal hurdles still to come, and offers advice for business owners and sellers. 

• Enforceability: Insights into the situation since the FTC ruling is facing significant legal challenges and its long-term impact remains uncertain.
• Usability: Discussion about how non-compete clauses are commonly overused but have valid applications, particularly in M&A transactions, and reasonable restrictions may be enforceable.
• Legal Counsel: Business owners should promptly address employment agreements with legal counsel to understand compliance obligations and alternative protections.
• Implications: Thoughts on the future ramifications of this ruling in an overview of the potential legal and economic impact on business owners and employees.

• M&A Non-Compete Agreement | A Complete Guide
• Alternatives to Non-Competes with Employees
• “State Noncompete Law Tracker, Economic Innovation Group,” Map showing non-compete laws by state in the United States, June 25, 2024
• “Federal Register – Non-Compete Clause Rule,” National Archives document with a summary of the FTC non-compete ruling, May 7, 2024
• “Comparative Perspectives on Non-Compete Clauses in the United States, United Kingdom, and Singapore,” Moynihan, Nadia; American Bar Association, September 14, 2023
• “FTC Announces Rule Banning Noncompetes,” Federal Trade Commission announcement, April 23, 2024

Additional Resources:

• Planning to sell your business? Schedule a free consultation today.
• Download a free PDF copy of The Art of The Exit: The Complete Guide to Selling Your Business, Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue, and Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.
• Purchase your copy now of A Beginner’s Guide to Business Valuation | The Exit Strategy Handbook | Closing the Deal

Listen to Other Episodes

• How an M&A Attorney Can Help Sell Your Business with Jessica Fairchild
• A Lawyer, a Banker, and a Seller Walk Into a Bar … with Michael Frankel
• Navigating Food and Beverage Regulations for Mergers and Acquisitions with Darshan Kulkarni