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Ted Hollis Writes Article for Indiana Lawyer About Potential Impact of Proposed Federal Rule on Noncompete Clauses


Ted Hollis, a Labor, Employment & Benefits partner in the Quarles & Brady Indianapolis office, authored an article for The Indiana Lawyer about the likely impact in Indiana of possible new federal government guidance on noncompete clauses.

Earlier this year, the Federal Trade Commission (FTC) proposed a rule banning noncompetes at the national level, and the general counsel for the National Labor Relations Board (NLRB) asserted in a memo that noncompetes could violate the rights of employees protected by the National Labor Relations Act.

In an excerpt from the article, Hollis outlined what this direction could mean in Indiana:

The enforceability of noncompete agreements in Indiana is currently governed by specific state-law criteria, emphasizing reasonableness, legitimate business interests, good consideration, written form and adherence to public policy. However, the proposed FTC rule and the NLRB general counsel’s memo could significantly impact enforceability of noncompete agreements at both the federal and state levels.

If the FTC’s proposed rule is enacted, it could lead to a nationwide ban on noncompete agreements, potentially superseding Indiana’s existing rules. The NLRB memorandum, on the other hand, may offer additional protection to nonsupervisory employees, resulting in increased challenges against restrictive noncompete agreements. As these developments unfold, businesses in Indiana will need to closely monitor changes in the law and seek legal counsel to ensure compliance with the evolving legal landscape.



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