How the FTC's Final Non-Compete Rule Could Hurt VC Returns

Healthcare employment attorney Mark Peters was cited in a Venture Capital Journal article discussing how the Federal Trade Commission's (FTC) new rule against non-compete clauses affects senior executives and other company policymakers. He highlighted that the rule's application might exclude division leaders and those in charge of individual facilities from being considered as senior executives eligible for restrictive covenants. Mr. Peters explained that the FTC's narrow interpretation of a senior executive could pose challenges for companies.

"[It] would be difficult for that entity, because those senior executives who can't decide policy for the entire company but clearly are deciding policies for their division or their individual facilities are valuable people that you would want to have enforceable restrictive covenants for, but under this rule would appear not to be covered," he said.

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