Breaking News: Noncompete Ban Not Dead Yet!

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October 18, 2024

As you know, the Federal Trade Commission (FTC) previously issued a rule that would ban most employee noncompetes throughout the United States.  See our previous updates NLRB Seeks Aggressive Enforcement Against Employers for Unlawful Non-Compete and “Stay-or-Pay” Provisions, Breaking News: Federal Court Halts FTC Noncompete Ban, The FTC’s Ban on Noncompetes Remains Imminent for Most Employers as Legal Challenges Continue, and Breaking News: FTC Finalizes Nationwide Noncompete Ban.  However, a few weeks prior to the rule’s effective date, the Northern District of Texas vacated it on the premise that the FTC exceeded its legal authority.  Today, the FTC filed its notice of appeal which means the case is headed to the Fifth Circuit Court of Appeals for a second look.

What does this mean?  This means there is still a chance the FTC’s proposed noncompete ban will be revived.  However, even if the Fifth Circuit agrees to uphold the ban, it is likely the case will be appealed again to US Supreme Court.  Stay tuned for more updates from your Ruder Ware team.  In the meantime, if you have questions do not hesitate to contact any member of the Employment & Benefits Team.

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