On July 3, the U.S. District Court for the Northern District of Texas a limited preliminary 听injunction and stay of the Federal Trade Commission鈥檚 noncompete final rule, holding that the FTC exceeded its statutory authority and violated the Administrative Procedure Act. The Court limited the scope of the injunctive relief to named plaintiff Ryan LLC and plaintiff-intervenors the Chamber of Commerce of the United States of America; the Business Roundtable; the Texas Association of Business; and the Longview Chamber of Commerce.

鈥�For any employer that was not a plaintiff or plaintiff-intervenor in the action, the noncompete rule is听still听set to take effect on Sept. 4, 2024, although the court鈥檚 opinion clearly casts doubt on the long-term viability of the noncompete rule,鈥� .

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 Federal Trade Commission鈥檚 final rule to ban noncompete clauses.

老牛影视members have valid business justifications for utilizing noncompete agreements, such as protecting confidential information and intellectual property.

Background

On April 23, the Federal Trade Commission voted 3-2 to issue its听.

, 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 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:

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. 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.