About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

100 Notre Dame L. Rev. Reflection 1 (2024)

handle is hein.journals/ndalro100 and id is 1 raw text is: ESSAYS SCRUTINY OF EMPLOYEE COVENANTS NOT TO COMPETE UNDER THE RULE OF REASON: AN EMPIRICAL INQUIRY Daniel A. Crane* INTRODUCTION For over 300 years, the common law has scrutinized employee cov- enants not to compete for their reasonableness.1 That is about to change. On April 23, 2024, the Federal Trade Commission announced a rule that will prohibit employers from imposing noncompete agree- ments on workers.2 The rule declares all covenants not to compete in the employment context to be unfair methods of competition under section 5 of the FTC Act.3 If the rule takes effect, thirty million con- tracts will become illegal.4 The FTC justifies this rule based on the ostensibly pernicious effects of employee covenants not to compete- © 2024 Daniel A. Crane. Individuals and nonprofit institutions may reproduce and distrib- ute copies of this Essay in any format at or below cost, for educational purposes, so long as each copy identifies the author, provides a citation to the Notre Dame Law Review Reflection, and includes this provision in the copyright notice. * Richard W. Pogue Professor of Law, University of Michigan. I am grateful for ex- cellent research assistance by Billy Stampfl, Michael Turner, and Lennart Levita and for many helpful comments and suggestions by Alan Meese. 1 See Harlan M. Blake, Employee Agreements Not to Compete, 73 HARV. L. REV. 625, 629 (1960). 2 See Non-Compete Clause Rule, 89 Fed. Reg. 38342 (May 7, 2024) (codified at 16 C.F.R. pts. 910, 912); Press Release, FTC, FTC Announces Rule Banning Noncompetes (Apr. 23, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc- announces-rule-banning-noncompetes [https://perma.cc/2NFW-AVDK]. 3 Non-Compete Clause Rule, 89 Fed. Reg. at 38342 (The final rule provides that it is an unfair method of competition for persons to, among other things, enter into non- compete clauses ... with workers on or after the final rule's effective date.). 4 Eugene Scalia, The FTC's Breathtaking Power Grab over Noncompete Agreements, WALL ST. J. (Jan. 12, 2023, 6:50 PM), https://www.wsj.com/articles/the-ftcs-breathtaking-power- grab-noncompete-agreements-rule-capital-investment-wage-gap-job-growth-compliance- 11673546029 [https://perma.cc/R9DM-QJGE]. 1

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most