ANALYSIS: Employers Would Be Fine Without Noncompetes

Ever since the Federal Trade Commission announced its proposed regulation to ban noncompetition agreements in employment, legal commentators have been worrying about the impact on businesses’ proprietary information.

But even if the FTC’s regulation goes into effect as proposed—an uncertain outcome given the likelihood of litigation—we shouldn’t expect the sky to fall. Wide swaths of the workforce have been functioning without noncompetes for decades, and employers still have plenty of tools to protect themselves from unfair competition. In fact, employers don’t need noncompetes and, like their employees, may even be better off without them.

Why Noncompetes?

Employers use noncompetes to ...