I frequently assist clients in drafting and negotiating non-compete clauses as part of larger agreements for the sale of business, employment, and lease of property. One question that sometimes arises is: when do non-compete clauses in these contexts raise antitrust concerns? The answer to this question, typically, is that they do not.
The purpose of the Sherman Act ("Act") is to guard against unreasonable restraints of trade. Key to establishing a claim under the Act is the establishment of an "antitrust injury." See, e.g., Cole v. Champion Enterprises, Inc., 496 F. Supp. 2d 613, 634 (M.D.N.C. 2007). To establish an antitrust injury, a plaintiff must prove more than mere individual injury, rather an injury to competition. See id. This is because "antitrust laws were enacted for the protection of competition, not competitors." Id. view more