Manatt Entertainment Partner Christopher Chatham, Associates Douglas Smith and Sandra Bignone and Counsel David Schur wrote an article for Law360 about uncertainty in the entertainment industry following the Federal Trade Commission’s decision to ban nearly all noncompetition agreements.
With the protections normally afforded by these agreements currently on hold, studio heads and content owners may be concerned about what’s at stake while creators simultaneously may be able to move to new companies freely despite prior noncompete agreements. The FTC’s rule is already facing challenges in court, but the authors said everyone should assume noncompete agreements are not enforceable until the courts make a decision.
“With noncompetes no longer a factor, many studios could not only see their top talent leave but also see their market position threatened as creatives and professionals flock to studios willing to pursue the emerging media format,” the authors wrote. “Whether the FTC's action will speed up the fall of traditional media remains to be seen.”
Read the full article here.