On May 24, 老牛影视joined the U.S. Chamber of Commerce and more than 200 national associations and state and local chambers in the Federal Trade Commission to stay the effective date of its in order to allow for judicial review. The effective date of the rule is Sept. 4.

The to the FTC states, 鈥�Although the noncompete rule鈥檚 legal fate remains in question, it is already imposing significant costs and uncertainty on the U.S. economy. Businesses are identifying existing noncompetes and notifying employees and former employees that their noncompetes may no longer be enforceable. Companies are incurring substantial legal costs as they explore other tools to attempt to protect their investments, and workers are losing training opportunities and bargaining power to negotiate compensation.

鈥淎 brief delay would comport with the commission鈥檚 mission of enforcing federal law in a cost-effective manner. As set forth in the commission鈥檚 current strategic plan, the commission 鈥榮trives to efficiently address the competitive concerns raised by a merger or business practice and works toward a solution that maintains competition in the marketplace without unduly burdening legitimate business activity.鈥� In keeping with this goal, a brief delay would provide invaluable certainty to the business community and, if the rule ultimately is enjoined, potentially conserve significant resources around the country,鈥� the letter said.

On May 14, 老牛影视joined a broad group of trade associations in filing an听听in support of plaintiffs鈥� request for injunctive relief against the FTC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鈥攊ncluding 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. 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.

Background:

On April 23, the FTC voted 3-2 to issue its听, which goes into effect on Sept. 4. 老牛影视issued a听news release听opposing the rule.

, 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.

FTC Resources on the Final Rule:

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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.