Transaction-Related Noncompete Agreements Face FTC Fire | New York Law Journal
We have seen aggressive antitrust enforcement in recent years and the FTC’s scrutiny of noncompete agreements is likely to continue. In approving the DTE Energy consent order, Commissioner Wilson wrote in concurrence, “the commission will continue to scrutinize non-compete agreements to ensure that they are no broader than necessary to protect the legitimate interests of the parties.” Commissioners Chopra and Slaughter more emphatically argued in a joint concurrence that “too many firms impose noncompete clauses to avoid the discipline of a functioning marketplace,” and “the FTC should always be skeptical of non-compete agreements that unnecessarily suppress competition.” As such, practitioners and transacting parties should draft transaction agreements carefully so that they can avoid an FTC challenge.
Karen Hoffman Lent and Kenneth Schwartz are partners at Skadden, Arps, Slate, Meagher & Flom.
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