As I understand this new rule, it does not apply to M&A
by Dutch (2024-04-24 12:50:20)

In reply to: Yes and no  posted by catripledomer


As a result, I believe noncompetes in M&A transactions will continue to be enforceable. I also understand that the new rule does not prohibit nonsolicitation provisions (a common restrictive covenant preventing a person from soliciting customers or employees of his or her former employer).

I also agree with you that if noncompetes become unenforceable in M&A, then the value of a seller's business will be diminished. This is especially true in a service business like medical or dental. Seems like a double edged sword for the doctors.

It should be obvious, but none of this is legal advice.



Hopefully M&A is excluded
by catripledomer  (2024-04-24 17:32:58)     cannot delete  |  Edit  |  Return to Board  |  Ignore Poster   |   Highlight Poster  |   Reply to Post

Lack of non-solicitation agreements / clauses would very much disrupt the M&A market as well. It's very difficult to protect a newly acquired asset if it can be cannibalized shortly after transfer.