Adam Israel Discusses Legal Challenges to the FTC's Noncompete Rule with American City Business Journals

Adam Israel, a partner in the firm’s Birmingham office and member of the Litigation Practice, interviewed with American City Business Journals (ACBJ) about the legal challenges to the Federal Trade Commission’s (FTC) rule to prohibit noncompete agreements. 

The rule, which was slated to go into effect on September 4, 2024, has faced significant legal challenges, and has now been blocked from taking effect by a federal judge in Texas.

The ACBJ featured Adam in the article, “Court blocks game-changing federal rule for employers,” published on August 20, 2024, as part of its ongoing series, The Playbook.
Adam explained how he expects this ruling to be appealed to the Fifth Circuit, noting that this is just the beginning of the process.

“It's still very important to know what is enforceable and what is not enforceable in each state a business operates in. And it’s not a one-size-fits-all situation," ACBJ quoted Adam as saying. 

During the interview, Adam highlighted why companies must remain vigilant, staying updated on the legal challenges, and the complex patchwork of state laws that govern noncompete agreements.

“Absent this FTC rule, non-competes and other restrictive covenants, like non-solicitation agreements, are really creatures of contract and they're governed by state law,” Adam said. 

When asked about advice to businesses, Adam recommended companies work to tailor their covenants to the protection that they need. 

“If your primary concern is customer relationships, then a non-solicitation agreement, which were not going to be invalidated by the FTC rule, should provide you the protection that you're looking for that would prevent former employees from going after specific customers and clients of a business,” Adam said. “If on the other hand, your primary concern is you've put in all this training and you've given access to confidential information that sort of can't be emptied out of one's head when they leave, then a non-compete may actually be the more appropriate mechanism for protecting the business's interest there. But I think it's always really important for a business to evaluate, okay, what are our interests that actually need protecting? And are we tailoring our restrictive covenants to be narrow enough to protect those interests, but also to be the least restrictive agreement for an employee? Because I think that's going to make the enforcement of those covenants much more likely.” 

Adam focuses on complex business litigation, including in the areas of business torts and unfair competition. A substantial portion of Adam’s practice is devoted to representing businesses and individuals in non-compete, non-solicitation, and theft of trade secrets cases in trial and appellate courts. 

Adam was recognized by the Birmingham Business Journal as a “Top 40 Under 40” in 2021 and “Rising Star Lawyer” in 2016. He is listed among The Best Lawyers in America^® “Ones to Watch,” Benchmark Litigation’s “Under 40 Hot List” and by Mid-South Super Lawyers as a “Rising Star” in the Business Litigation practice area.