Keywords
antitrust; employment law; trade secret law; administrative law
Abstract
When the Federal Trade Commission (FTC) issued a rule banning noncompete agreements as unfair methods of competition, it reinvigorated debates regarding the purpose of federal antitrust law. At its core, federal antitrust law seeks to preserve a competitive economy and promote new entry into the marketplace, primarily to protect consumer interest. Under President Biden’s administration, the FTC has increased its efforts to expand the scope of antitrust protection beyond consumer welfare by applying it to other public policy concerns, such as employee mobility. The FTC points to noncompete agreements as detrimental constraints to employees’ economic freedoms. In practice, employment noncompetes have escaped the scrutiny of federal antitrust laws as courts have generally treated such agreements as matters governed under state contract law.
This Note contributes to the ongoing discourse regarding the reach of federal antitrust laws and their applicability in regulating noncompete agreements. Foregoing discussions that scrutinize the FTC’s rulemaking authority, this Note instead examines the noncompete rule under judicially created antitrust doctrines. Despite the rule’s plain language to ban all noncompetes, this Note treats the ban effectively as a per se antitrust violation. This Note argues that the reviewing courts should continue to apply the rule of reason—a three-part inquiry to determine the legality of an activity that may restrict competition—in future antitrust challenges to noncompetes, as vertical restraints between an employer and employee. In conclusion, this Note supplies recommendations for reviewing courts and potential litigants on how to tailor their rule of reason analysis.
Recommended Citation
Erin Lee,
Surviving the Rule of Reason: An Antitrust Analysis of Employment Noncompetes,
93 Fordham L. Rev. 225
(2024).
Available at: https://ir.lawnet.fordham.edu/flr/vol93/iss1/6