The Federal Trade Commission (FTC) has issued a new ruling (as of May 2024) regarding the enforceability of non-compete agreements. This ruling will impact every business, regardless of industry, so attorney Darshan Kulkarni joins M&A Talk to discuss the legal and economic implications of this controversial decision. He highlights how employers and attorneys can handle this situation, discusses the potential effects on employees and the legal hurdles still to come, and offers advice for business owners and sellers.
“This [non-compete ruling] fundamentally goes to the question of workers’ rights, but it also goes to a business’s right to exist and protect its own interests.”
Darshan Kulkarni
What You’ll Learn
Enforceability: Insights into the situation since the FTC ruling is facing significant legal challenges and its long-term impact remains uncertain.
Usability: Discussion about how non-compete clauses are commonly overused but have valid applications, particularly in M&A transactions, and reasonable restrictions may be enforceable.
Legal Counsel: Business owners should promptly address employment agreements with legal counsel to understand compliance obligations and alternative protections.
Implications: Thoughts on the future ramifications of this ruling in an overview of the potential legal and economic impact on business owners and employees.
Topics Covered
What is the FTC’s new ruling on non-competes in M&A deals? [1:28]
What will the impact of this new ruling be on business owners? [7:15]
What was the FTC’s process for putting this rule into effect? [10:45]
How is this change in non-competes going to negatively affect employees? [16:55]
How will this play out in litigation? Will it be brought in federal or state courts? [20:10]
What are the broader implications for businesses? [25:52]
How is this situation currently being handled by attorneys and investors? [29:10]
At what point should a business owner contact an employment lawyer to address this non-compete issue? [33:19]
Regulatory and Compliance Attorney for the Life Sciences, Kulkarni Law Firm | Philadelphia Area, USA
Darshan Kulkarni is the Principal Attorney at the Kulkarni Law Firm and focuses on helping with the regulatory and compliance needs of FDA-regulated companies and their service providers, including drug, device, and biopharmaceutical companies, advertising agencies, and even other law firms. Dr. Kulkarni has a doctorate in pharmacy, a master’s in quality assurance/regulatory affairs, and a juris doctor, among other degrees and certificates.
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