An Indiana Employment Attorney's Take on the Nationwide Ban on Non-Compete Agreements

As a Fort Wayne, Indiana Employment Law Attorney, I often get contacted by employees or perspective employees seeking legal guidance with respect to a non-compete agreement they signed or one that they are being told to sign.  

Generally speaking, Indiana courts disfavor non-compete agreements, however, the courts will uphold them if they drafted properly and aren't too overbroad.

The employment law landscape is potentially changing with the United States Federal Trade Commissions' announcement of its Final Non-Compete Clause Rule in April 2024, which bans post-employment non-compete clauses between employers and employees. The ban is expected to become final in approximately August 2024.  

Needless to say, my phone has been blowing up with calls from employment law clients in the Fort Wayne, Indiana area asking me questions about the FTC's ban and what impact it has on their non-compete agreements. 

I'll attempt to try to address some of the frequently asked questions that I've been getting.

  • Question: When is the non-compete ban going to go into place?
  • Answer: I'm expecting it to go into place in approximately August 2024...there's a 120 day waiting period following the publication of the FTC's ban in the Federal Register, which is the official journal of the federal government that contains government agency rules, proposed rules, and public notices.

  • Question: Is my current non-compete agreement enforceable against me?
  • Answer: Yeah, it's still enforceable. 

  • Question: Why did the FTC decide to ban non-competes? 
  • Answer: I think the current administration has played a big role in the emphasis of employee-rights. I think the FTC believes that non-compete agreements disfavor employees, stifle competition and suppress earnings of employees. The FTC thinks banning non-compete agreements will foster competition and increased employee earnings.  

  • Question: What does the non-compete ban impact?
  • Answer: It's pretty broad in that it covers all non-competes for employees (including employees and independent contractors) with a few exceptions. 

  • Question: Does it apply to my existing non-compete agreement that I signed a couple of years ago?
  • Answer: Yeah, I think in most situations the ban is applied retroactively resulting in a non-compete agreement signed a couple of years ago being unenforceable. 

  • Question: Is the ban actually going to go into place and allow me out of the non-compete agreement that I signed?
  • Answer: I suspect that there will be a number of legal challenges to the FTC's ban on non-compete agreements. Ultimately, I think the legal challenges will reach the United States Supreme Court where the FTC's ban will be adversely impacted.


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