On May 14, 老牛影视joined a broad group of trade associations in filing an in support of plaintiffs鈥� request for injunctive relief against the Federal Trade Commission鈥檚 final rule to ban noncompete clauses. Injunctive relief is appropriate and necessary to avoid the immediate and irreparable harm the FTC鈥檚 final rule would impose on the hundreds of thousands of American businesses鈥攍ike construction companies鈥攖hat appropriately rely on narrowly tailored noncompetes.

"Ultimately, this vastly overbroad rule will invalidate millions of reasonable contracts around the country that are beneficial for both businesses and employees. ABC members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property. This new rule will have a harmful effect on their companies as well as their employees, forcing companies to rework their compensation and talent strategies."

Background:

On April 23, the Federal Trade Commission voted 3-2 to issue its听. The rule is effective Sept. 4, 2024.

, under the new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule鈥檚 effective date. Existing noncompetes for senior executives can remain in force, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them.

老牛影视issued a听news release听opposing the rule:

鈥淭he final rule to ban all noncompete agreements nationwide鈥攅xcept existing noncompetes for senior executives鈥攊s a radical departure from hundreds of years of legal precedent,鈥� said Ben Brubeck, 老牛影视vice president of regulatory, legal and state affairs. 鈥淯ltimately, this vastly overbroad rule will invalidate millions of reasonable contracts鈥攊ncluding construction project contracts鈥攁round the country that are听beneficial for both businesses and employees.鈥�

老牛影视members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property. This new rule will have a harmful effect on their companies as well as their employees, forcing companies to rework their compensation and talent strategies.

FTC Resources on the Final Rule:

• 听

To learn more about the final rule and what happens next, read 老牛影视general counsel Littler Mendelson鈥檚听

In April 2023, 老牛影视submitted听comments听in opposition to the FTC鈥檚 unprecedented听听to ban noncompetes.听老牛影视also joined the U.S. Chamber of Commerce and 280 business groups in submitting听听urging the FTC to rescind the proposed rule.

The final rule is currently being litigated. Continue to monitor Newsline for updates.