Direct Sellers Update: Regulation, Law & Policy

Direct sellers can breathe easy for the time being. On August 20th, Judge Ada Brown for the United States District Court for the Northern District of Texas set aside the Federal Trade Commission’s (FTC) rule imposing a national ban on noncompete agreements, preventing the rule from taking effect across the country.

The recent FTC approval of a final rule banning non-compete agreements has sparked concern and uncertainty among direct sellers. Understandably, many are wondering how this ruling will impact their businesses and what steps they can take to protect themselves against unfair competition and misuse of their intellectual property. However, amidst the apprehension, it’s essential to remember that there are avenues for safeguarding your interests, and the FTC’s rule may not be as set in stone as it initially appears.

Direct sellers should take note of recent Federal Trade Commission enforcement actions and a proposed FTC rule which could fundamentally change the legal landscape for non-compete clauses. Under the FTC’s new approach, companies would not be permitted to enforce non-compete clauses against their workers. And yes, that includes independent contractors.