WRITING EXERCISE #1:

The text below the line is an excerpt from the FTC's final published Rule on non-competes. The Rule was published on April 23, 2024, and will become effective September 4, 2024, if not enjoined prior to that date. For this Writing Exercise:

1. Provide a statute map of the sections provided using EITHER the "If...then" format OR the red flag words method.

1. Answer the following questions:
   1. Is the statute civil or criminal?
   2. In what jurisdiction does the statute apply?
   3. Does the statute operate under any other regulation or statute?
   4. What behavior is the statute seeking to regulate?
   5. Whose behavior is the statute seeking to regulate?
   6. Does the statute provide for any tests? If so, summarize the test and identify whether it is a factor test, balancing test, or totality-of-circumstances.

910.2 Unfair methods of competition.

(a)Unfair methods of competition

(1)Workers other than senior executives.With respect to a worker other than a senior executive, it is an unfair method of competition for a person:

(i) To enter into or attempt to enter into a non-compete clause;

(ii) To enforce or attempt to enforce a non-compete clause; or

(iii) To represent that the worker is subject to a non-compete clause.

(2)Senior executives.With respect to a senior executive, it is an unfair method of competition for a person:

(i) To enter into or attempt to enter into a non-compete clause;

(ii) To enforce or attempt to enforce a non-compete clause entered into after the effective

date; or

(iii) To represent that the senior executive is subject to a non-compete clause, where the non-compete clause was entered into after the effective date.

(b)Notice requirement for existing non-compete clauses

(1)Notice required.For each existing non-compete clause that it is an unfair method of competition to enforce or attempt to enforce under paragraph (a)(1)(ii) of this section, the person who entered into the non-compete clause with the worker must provide clear and conspicuous notice to the worker by the effective date that the worker's non-compete clause will not be, and cannot legally be, enforced against the worker.

[...]

(3) Exception. If a person that is required to provide notice under paragraph (b)(1) of this section has no record of a street address, email address, or mobile telephone number, such person is exempt from the notice requirement in paragraph (b)(1) of this section with respect to such worker.

[...]

910.3 Exceptions.

(a)Bona fide sales of business.The requirements of this part shall not apply to a non-compete clause that is entered into by a person pursuant to a bona fide sale of a business entity, of the person's ownership interest in a business entity, or of all or substantially all of a business entity's operating assets.

(b)Existing causes of action.The requirements of this part do not apply where a cause of action related to a non-compete clause accrued prior to the effective date.

(c)Good faith.It is not an unfair method of competition to enforce or attempt to enforce a non-compete clause or to make representations about a non-compete clause where a person has a good-faith basis to believe that this part is inapplicable.