On September 5, 2025, the Federal Trade Commission gave up on its federal non-compete ban. As a result, employees who are subject to non-competes can no longer expect a white night, in the form of the FTC, to free them from their handcuffs when seeking to jump jobs. Instead, non-competes will once again need to be evaluated on a case-by-case basis for enforceability by counsel prior to an employee considering their options and a new employer considering hiring while being subject to a tortious interference with a contract claim. Otherwise, questions like the non-compete's duration, scope of activities, and geographic restrictions will be before the courts. Judges will need to determine if an employee had specialized training or investment from the employer, whether the non-compete concerns a job function dealing with trade secrets and conditional information, and how goodwill was utilized in forming the customer relationship. Then, there is the issue of the enforceability of liquidated damages clauses (predetermined damages for breach) and whether the court will fully strike an overly broad non-compete or instead blue pencil it into a more modified non-compete. Either way, employers who cannot gamble as to what a judge will do and face deep-pocket competitors, who will happily battle out poaching a start employee, should consider garden leave where the employee remains on payroll for the period of the non-compete to avoid ever having to earn a living otherwise while preserving loyalty for as long as the employer seeks.
Facing a Non-Compete Issue?
Whether you’re an employer seeking to enforce an agreement or an employee evaluating your options, Lieb at Law can help. Our attorneys are experienced in litigating restrictive covenants, negotiating employment agreements, and advising on strategies to protect your rights and business interests.
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