Antitrust Implications of Noncompete and Nonsolicitation Agreements

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Wednesday, November 4, 2020

Recorded event now available

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Course Materials

This CLE course will analyze noncompete and nonsolicitation features of employment agreements, service contracts, and agreements among competitors from an antitrust perspective. The panel will discuss how to balance competitive vs. noncompetitive effects of these agreements and best contracting practices to help minimize antitrust scrutiny.

Description

Antitrust authorities are increasingly scrutinizing noncompete provisions in employment agreements and other contracts. Because employment noncompetes limit where an employee can work, the employee may challenge these clauses as an unreasonable vertical restraint under the Sherman Act. Nonsolicitation or no-poaching agreements between service contractors and competitors may present additional antitrust issues.

The FTC and DOJ released its Antitrust Guidance for Human Resource Professionals in 2016, indicating the DOJ will conduct criminal investigations of competitors that agree to fix wages or other terms of employment or agree not to recruit another company's employees. Companies that compete for similar employees may be deemed "competitors" regardless of their business models.

To help minimize antitrust scrutiny, employers' use of noncompetes should confer some pro-competitive benefits. Employers should generally avoid entering into noncompete agreements with employees without access to sensitive information or specialized knowledge or skills. Any noncompete agreement should be tailored to the employer's specific circumstances and should further a legitimate business interest.

Companies may wish to carefully tailor (or avoid) nonsolicitation agreements with departing employees, service providers, and other potential competitors to avoid any appearance of collusion, which might give rise to antitrust liability.

Listen as our authoritative panel examines the antitrust issues that can arise from the use of noncompete and nonsolicitation agreements. The panel will also offer practical advice on when such agreements are appropriate and how they should be crafted to avoid antitrust scrutiny.

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Outline

  1. Treatment of noncompetes under antitrust statutes: rule of reason
  2. Nonsolicitation and no-poaching agreements: 2016 guidance
  3. Drafting agreements to withstand antitrust scrutiny
    1. Noncompetes
    2. Nonsolicitation/no-poaching

Benefits

The panel will review these and other key issues:

  • When is a noncompete appropriate in an employment agreement and when might it violate antitrust standards?
  • What other types of agreements include noncompete provisions and what are the antitrust pitfalls?
  • What is the current FTC and DOJ position on nonsolitication and no-poaching agreements among competitors, and who is deemed a competitor?

Faculty

Clark, David
David J. Clark
Member
Epstein Becker & Green

Mr. Clark is part of his firm's Litigation and Employment, Labor & Workforce Management practices. His practice...  |  Read More

Dolive, Devin
Devin C. Dolive
Partner
Burr & Forman

Mr. Dolive's practice covers a broad-range of business disputes and employment matters, from the outset of the...  |  Read More

Pollard, Jonathan
Jonathan Pollard
Founder
Pollard

Mr. Pollard is a trial lawyer and commercial litigator and focuses his practice on competition law. He has extensive...  |  Read More

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