Legal Alert: New Executive Order Encourages Limits on Non-Compete Agreements
On Friday, July 9, 2021, President Biden released an Executive Order encouraging the Federal Trade Commission (the “FTC”) to ban or limit employers’ use of non-compete agreements. The FTC has yet to make any statement or publish any guidance regarding this new Order, and there is no indication that existing non-compete agreements will be voided by any future rule making by the FTC.
For now, employers should continue complying with applicable state laws. Indiana allows the use of non-compete agreements in limited circumstances: a non-compete agreement is enforceable where the agreement seeks to protect the employer’s reasonable interests and the agreement is reasonable in scope. Employers should stay tuned for future guidance from the FTC. The author thanks law clerk Jozie M. Barton for her assistance with this article.
The fact sheet on the Executive Order can be found here.