As if California statutory and case law limiting non-competition clauses was not complicated enough, the Federal Trade Commission (FTC) now has entered the fray. Based on the current proposed FTC rules, the law in California on restrictions of non-competes may expand to include “non-employees” as well as to limit the current “sale of a business” exception and to require notice of recission of any such clauses. And, of course, understanding the FTC’s proposed rule is important for California entities with employees and contractors in the many states which, unlike California, do not have restrictions on non-compete clauses.
