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Restrictive Covenants Franchises

Lathrop GPM

Michigan Federal Court Grants Franchisor’s Motion for Preliminary Injunction Against Former Restoration Service Franchisee

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A federal court in Michigan has granted a franchisor’s motion for preliminary injunction against former franchisees for violating the franchise agreements’ post-termination noncompete provisions. 1-800 Water Damage Int’l LLC...more

Skadden, Arps, Slate, Meagher & Flom LLP

FAQs About the FTC’s Broad New Ban on Noncompetes

When the Federal Trade Commission (FTC) issued its long-awaited final rule banning virtually all noncompete clauses between workers and employers, it also published 500-plus pages of commentary....more

Lathrop GPM

New Jersey Federal Court Partially Enforces Noncompete Covenant Against Former Franchisee

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A federal court in New Jersey recently granted a franchisor’s motion for a preliminary injunction, enjoining the former franchisee from using the franchisor’s marks and violating the franchise agreement’s noncompete clause,...more

Morrison & Foerster LLP

Potential Exceptions Under FTC’s Non-Compete Ban

On April 24, 2024, the U.S. Federal Trade Commission (FTC) promulgated its final rule prohibiting non-competes for most workers in the United States (the “Final Rule”). The Final Rule raises several issues, including...more

Williams Mullen

Are Your Non-Competes Still Valid? A Summary of the New Federal Trade Commission Rule

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On April 23, 2024, the Federal Trade Commission (FTC), pursuant to sections 5 and 6(g) of the Federal Trade Commission Act (the “Act”), issued their final “Non-Compete Clause Rule” (Rule). This Rule provides that non-competes...more

Polsinelli

What is the Impact of the FTC’s Final Non-Compete Rule on Franchisors and Franchisees?

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As explained in Polsinelli’s prior alert of April 24, 2024, the FTC announced its final rule on non-compete covenants (the “Rule”) on April 23, 2024. Critically, the Rule does not prohibit non-compete agreements between...more

Akerman LLP

New FTC Rule Spares Non-Compete Clauses That Bind Franchisees, But Bans Most “Worker” Non-Compete Clauses

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On April 23, 2024, the Federal Trade Commission (FTC) voted to issue a Non-Compete Clause Rule that would ban most non-compete clauses in agreements between businesses and their “workers.” The final rule will take effect 120...more

Lathrop GPM

Federal Trade Commission Excludes Franchise Relationship From New Rule Prohibiting Non-compete Agreements

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A big sigh of relief for franchisors: the FTC’s new rule prohibiting non-compete covenants will not apply to the franchisor-franchisee relationship. As expected by many, yesterday the FTC adopted sweeping new...more

UB Greensfelder LLP

FTC Issues Rule Prohibiting Non-Competes

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On April 23, 2034, the Federal Trade Commission (FTC) issued a final rule intended to ban the use and enforcement of most non-compete clauses signed by workers. The new rule is not in effect yet. It will become...more

Hendershot Cowart P.C.

FTC Votes To Adopt Final Rule To Ban Non-Compete Agreements

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On April 23, 2024, the Federal Trade Commission (FTC) voted to publish the “Non-Compete Clause Rule” to ban employers from entering into non-compete clauses with workers on or after the effective date. The rule will be...more

Fox Rothschild LLP

FTC Bans Virtually All Employment-Based Noncompete Agreements, Business Groups Seeking Injunction

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In a rare public meeting, the Federal Trade Commission (FTC) voted 3-2 on April 23, 2024, to approve a final regulatory rule (Final Rule) which bans virtually all preexisting and future noncompete agreements with very few...more

Fox Rothschild LLP

Georgia Court Finds Hooter’s Franchise Non-Compete Unreasonable in Geographic Scope

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A district court in Georgia recently granted a Motion for Preliminary Injunction filed by HOA Franchising, LLC’s, the franchisor of the Hooters restaurant chain (“Hooters”), against one of its former restaurant franchisees,...more

Lathrop GPM

Eleventh Circuit Affirms in Part, Reverses in Part, District Court Determination to Blue Pencil and Enforce Noncompete Agreement

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The Eleventh Circuit Court of Appeals recently affirmed in part, and vacated in part, a district court’s issuance of an injunction preventing a franchisor’s enforcement of a noncompete covenant as written but allowing...more

Lathrop GPM

Minnesota Prohibits Certain Restrictive Covenants in Franchise Agreements

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Reflecting a shifting national landscape on restrictive covenants, the Minnesota Legislature recently adopted legislation that prohibits franchisors from placing certain nonsolicitation and no-poach restrictions in franchise...more

AEON Law

Patent Poetry: Is this the end of the employee non-compete?

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On January 5, the Federal Trade Commission (FTC) issued a Notice of Proposed Rulemaking (NPRM) that seeks to severely limit the scope of employee non-competes. This would bring federal law into alignment with the laws of...more

Bradley Arant Boult Cummings LLP

FTC Proposes Rule to Strike Noncompete Agreements Nationwide

On January 5, 2023, the Federal Trade Commission (FTC) announced a proposed new rule that would effectively prohibit employers from requiring employees to agree to noncompete clauses. The public is invited to submit comments...more

BakerHostetler

Decision Benefits Franchise Businesses and Finds Alston Bars Challenge to No-Poach Agreements

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In June 2021, the Supreme Court reaffirmed in NCAA v. Alston that antitrust claims under Section 1 of the Sherman Act “presumptively” call for rule-of-reason analysis and that only the rare case merits “quick look” or per se...more

Lewitt Hackman

Franchisor 101: Taking the Red Pill on Non-Competes

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Franchisors and franchisees in California have long conducted themselves based on precedent that voids post-termination covenants against competition in a franchise agreement in California. Recently, a franchisor’s ability to...more

Lathrop GPM

The Franchise Memorandum - Issue #253

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Welcome to The Franchise Memorandum by Lathrop GPM, formerly known as The GPMemorandum. Below are summaries of recent legal developments of interest to franchisors. Given the widespread and evolving impact of the COVID-19...more

Lathrop GPM

The Franchise Memorandum - Issue 250

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Ohio Federal Court Awards Damages to Matco for Breach of Contract, Trademark Infringement, and Misappropriation of Trade Secrets - A federal court in Ohio has granted a franchisor’s unopposed motion for summary judgment...more

Faegre Drinker Biddle & Reath LLP

Top 10 Noncompete Developments of 2019

If there was any question about whether there is a growing national trend to limit the enforceability of noncompetition agreements, 2019 settled the matter. Seven states enacted new statutes designed to limit the...more

Seyfarth Shaw LLP

State Attorneys General Urge FTC to Consider Labor Issues in Antitrust Enforcement

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A group of 18 state attorneys general (the “AGs”) recently filed comments with the Federal Trade Commission (“FTC”) in advance of a series of hearings centered on changes to antitrust and consumer protection enforcement in...more

Orrick - Trade Secrets Group

Washington Restricts Use of Non-Competition Agreements

Earlier this year, Washington adopted a new law—Engrossed Substitute House Bill 1450—that places significant restrictions on the enforceability of non-competition agreements. The law applies to “every written or oral...more

Fox Rothschild LLP

Just Signed! New Washington State Law Limits Use Of Non-Competes And No-Poach Agreements

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Yesterday, Washington’s Governor, Jay Inslee signed HB1450 [PDF] which targets the use of restrictive covenants in the State of Washington (the “Non-Compete Act”). The signing of the Non-Compete Act follows the recent...more

Shumaker, Loop & Kendrick, LLP

Employee ‘No Poaching’ Agreements Meet the Antitrust Laws: Protection of Employees in the New Economy

For centuries employers have maintained a strong interest in trying to protect their most valuable asset, their key employees, from solicitation by and loss to other employers, especially competitors. As a result, “no...more

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