The adopted FTC Rule voids all present and future employee non-comps after a 120 day waiting period.  This Rule will surely be challenged in court and such a challenge likely will delay implementation.  It should be noted that the scope of the Rule is unclear as to which executives it applies to, how it functions in an M&A transaction, how it impacts such ancillary prohibitions such as inability to take employees or marketing to existing clients, etc.  There is also a date before which institution of litigation by employers based on old noncomps (which would otherwise be voided) may be valid.

This post, and my firm’s Client Alert (just google DuaneMorris.com and hit Alerts tab), are not legal advice.  Employees and employers are likely wise to review their particular situations and revert to their counsel with any questions. Much is unclear at this juncture but the driver of this action is to create competition in the marketplace and increase wage opportunities for the workforce.  No doubt future posts will seek clarity and will surely report on any delaying litigation.