Goldberg Segalla partner Danielle N. Malaty’s comprehensive article regarding the Federal Trade Commission’s ban on noncompetes has been published in “The Brief” – a publication by the American Bar Association.

The piece, entitled “An Overview of the Rapidly Changing Legal Landscape Following the FTC’s Noncompete Ban,” discusses the legal hurdles and rulings that have been issued in cases challenging the rule.

According to Malaty, “The rule makes it unlawful for a covered person (1) to enter into or attempt to enter into a noncompete clause, (2) to enforce or attempt to enforce a noncompete clause, and (3) to represent that the worker is subject to a noncompete clause.”

However, there have already been several legal hurdles that may present challenges to the enforceability of the rule, including the recent Texas federal district court order that invalidates it. Additionally, the U.S. Supreme Court has already issued two rulings in separate cases that address the noncompete ruling, which Malaty covers extensively in the piece.

“Assuming the rule survives the various legal challenges that have been made to it…if and when it becomes effective, all existing noncompetes subject to the rule will cease being enforceable,” Malaty said.

Malaty then went on to offer guidance on noncompetes, saying it is essential for businesses to make sure they are buttoned up and protected amid the evolving legal landscape.

“Given the ongoing likelihood for restructuring of jurisprudence on the issue of noncompetes, it will become increasingly critical for businesses across the country to consult with legal counsel to review and update noncompete agreements and ensure existing noncompete agreements comply with state laws (as the federal ban is currently blocked),” said Malaty. “It may also be necessary to consider narrowing the scope and duration of noncompete clauses in an effort to ensure they will be enforceable under a variety of differing state and local laws, regulations, and guidelines.

“What was previously considered a fairly straightforward question of contract law may now be construed as a trade secret matter, subject to wholly different elements of proof and corresponding necessary steps to take decisive action.”

READ THE FULL ARTICLE HERE (SUBSCRIPTION REQUIRED)

MORE ABOUT DANIELLE N. MALATY:

Danielle is an accomplished trial and appellate attorney who focuses her practice on counseling and defending a broad range of businesses, public entities and professionals in all aspects of employment and labor matters, including claims of discrimination, harassment, retaliation, and other workplace misconduct. Danielle also represents lawyers, directors and officers in professional liability claims. Her versatility, attention to detail, and dynamic approach to the practice of law allow her to understand her clients’ evolving needs and provide them with thorough and thoughtful advice in a constantly evolving legal landscape. Danielle values her relationships with clients and consistently provides them with a perspective on liability that is curated around their needs and legal obligations. She is an avid student of appellate law and prides herself on bringing the most up-to-date perspectives borne of recent appellate developments to both her clients and the courts.