Employers have been keeping a close watch for rulemaking and action by the Federal Trade Commission restricting non-competes. The FTC answered the Executive Order’s call with enforcement activities and a proposed rule signaling a considerable effort to prioritize employer-employee non-compete covenants as an area for increased enforcement. In this video, our Labor & Employment, Antitrust & Competition and Trade Secrets lawyers discuss the FTC’s proposed rule and enforcement activity, what it means for employers, and what employers can do now to protect their trade secrets in light of what may be coming from the FTC.

On 10 November 2022, following a 3-1 vote, the Federal Trade Commission issued a policy statement expanding its interpretation of the scope of unfair methods of competition under section 5 of the Federal Trade Commission Act. Section 5 of the FTC Act prohibits “unfair methods of competition,” which covers conduct that violates antitrust laws or section 5 itself.

On 19 October 2022, the US Department of Justice’s Antitrust Division announced that seven directors had resigned from their respective corporate board positions in response to concerns of interlocking directorates. This announcement followed reports that DOJ had issued letters to numerous public companies, investors, and individuals last month. The letters reportedly indicated that DOJ was examining potential interlocks and advised the targets of the risk of potential enforcement actions. DOJ’s muscular posture toward enforcement under Section 8 of the Clayton Act is only the “first in a broader review of potentially unlawful interlocking directorates.”

Over the past few months, the Federal Trade Commission has engaged in a comprehensive review of how the agency should evaluate antitrust issues affecting the pharmaceutical distribution stack.