The Federal Trade Commission’s (“FTC”) threats of “cracking down” on non-competition agreements transformed into actual action with two dramatic moves this week. First, on January 4, the FTC ordered three companies, Prudential Security, O-I Glass, Inc., and Ardagh Group SA, to not enforce their non-competition agreements based upon the FTC’s finding that the noncompetition agreements were illegal restraints on the companies’ employees. Second, and even more striking, on January 5, the FTC proposed an outright ban on non-competition clauses in employment contracts. The proposed ban would prohibit employers from entering into or enforcing such clauses and would require employers to nullify any existing non-competition clauses within six months.
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