•  
  •  
 

University of Miami Business Law Review

Document Type

Notes and Comments

Abstract

This Comment critically examines the Federal Trade Commission’s (FTC) now–abandoned rule that sought to ban noncompete clauses in employment contracts, emphasizing the limitations of advice provided by attorneys, legal scholars, and experts who advocate for a “wait–and–see” approach during its development and subsequent litigation. Noncompetes, while serving as a tool for employers to safeguard proprietary interests and limit competition, also restrict employee mobility and bargaining power. The FTC’s proposed rule, which aimed to ban most noncompete clauses, faced immediate and substantial legal challenges under the major questions and nondelegation doctrines.

Although the FTC ultimately ceased defending the rule and acceded to its vacatur in 2025, the debate it sparked continues to influence both policy and practice. Ongoing state–level legislative activity and the FTC’s shift toward case–by–case enforcement have sustained uncertainty regarding the permissible scope of restrictive covenants. Expert recommendations favoring a passive or reactive stance underestimate the compliance and competitive risks posed by these evolving developments.

This Comment argues that a forward–looking approach, which contrasts with the wait–and–see method, offers a more secure and adaptable framework. It includes proactive strategies such as well–constructed nonsolicitation and confidentiality agreements and improvements in employee retention. Recommendations focus on minimizing restrictive covenants while maximizing retention and competitive advantage, effectively preparing employers for a potential noncompete–free regulatory environment.

Download

Share

COinS