Muskat Devine Partner Mike Muskat is featured in a CoStar article on the Federal Trade Commission’s recent decision to ban the use of noncompete agreements which are designed to prevent some employees from jumping to rival businesses. CoStar is considered the industry’s most comprehensive platform for commercial real estate information, analytics and news.
In the article, “U.S. Real Estate Brokers Could See Exit of Noncompetes With FTC’s New Ruling,” Mr. Muskat explained that it could be some time before the ruling takes effect because businesses are likely preparing objections to take before federal judges throughout the country.
“All it will take is one federal judge, of which there are hundreds around the country, to issue an injunction and say the FTC cannot enforce this rule for it to effectively be adjourned across the whole country,” said Mr. Muskat. “Members of the business community have prepared their lawsuits, with many ready to go as soon as tomorrow.”
According to the article, an estimated 30 million workers are subject to noncompete agreements. In its ruling, the FTC determined that the contracts are an unfair method of competition, violating a section of the FTC Act. In a statement, FTC Chair Lina Khan said the contracts keep wages low, suppress new ideas and “rob the American economy of dynamism.”
Mr. Muskat added that because the ruling is such a source of contention, the matter could be tied up in courts for years and may eventually head to the U.S. Supreme Court.
It will take 120 days after the FTC’s final ruling is published in the federal register before it becomes law.
To read the full article, click here.