The Antitrust Implications of Non-Compete Agreements

The Federal Trade Commission’s (FTC) recent settlement in In the Matter of Oltrin prohibiting use of a geographic non-compete by two companies in the bulk bleach industry is a reminder that the antitrust agencies look closely at non-competes, especially when the parties to the non-competes have market power.

What Is a Non-Compete Agreement?

Non-compete agreements are typically found in employment contracts, agreements for the purchase of a business or certain assets of a business, or in service provider agreements. For example, an employer may require an employee – particularly if highly skilled – to sign a non-compete agreement restricting the employee from competing against the employer for a limited period of time after the employee leaves the company and within a certain geographic area. Similarly, a company purchasing the assets of a competitor may include a provision in the purchase agreement prohibiting the competitor from competing in the relevant geographic or product market for a period of time.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.