Well, that was quick. After rejecting a request for a nationwide injunction in her original opinion granting the plaintiffs’ motion for a preliminary injunction, and then summarily denying a motion to reconsider that ruling, this afternoon U.S. District Court Judge Ada Brown reversed course, granted summary judgment against the FTC, and effectively entered a nationwide ban against the Federal Trade Commission’s Final Rule banning noncompetes. This should mean that employers around the country will not have to send out notices to their former and current employees telling them their noncompetes are no longer valid, as the Final Rule required by September 4, 2024. For a concise review of Judge Brown’s opinion, read on.Continue Reading Ding, Dong, the Rule is Dead: Judge Brown Effectively Enters a Nationwide Ban Preventing Enforcement of the FTC’s Noncompete Rule
As widely predicted, U.S. District Court Judge Dana Brown granted Ryan, LLC’s motion for a preliminary injunction against the Federal Trade Commission’s (FTC) Final Rule banning noncompetes. In her July 3, 2024 opinion, Judge Brown found that the FTC “lacks substantive rulemaking authority with respect to unfair methods of competition.” She also enjoined the FTC from implementing or enforcing the Final Rule against the parties in that case, which included the plaintiff Ryan, LLC, the U.S. Chamber of Commerce and the Business Roundtable.
But while employers may cheer that decision, their noncompetes are not out of the proverbial woods yet. To date, Judge Brown has declined to issue a nationwide injunction prohibiting the FTC from enforcing its rule against other parties. This means that the FTC may still try to enforce its Final Rule against other employers who are not parties to that lawsuit. The FTC’s Final Rule becomes effective Wednesday, September 4, 2024 and it requires employers to provide a notice to current and former employees that their noncompetes are no longer enforceable. Given that impending deadline, many employers are concerned about the uncertainty left by Judge Brown’s decision. However, as explained below, the Final Rule may provide cover for employers under a “good faith” exception.Continue Reading Worried about the Current Uncertainty Over the FTC’s Noncompete Ban? How the FTC’s “Good Faith” Exception May Provide Cover to Employers
On April 23, 2024, the Federal Trade Commission issued its final rule banning the use of most employee noncompetes throughout the United States. It is estimated that this new rule will impact at least 30 million employment contracts, including confidentiality agreements and other forms of employee restrictive covenants. Several lawsuits have already been filed to
As readers of this blog know, on April 23, 2024, the Federal Trade Commission voted to adopt a rule banning virtually all employee noncompetes. The rule is scheduled to go into effect on September 4, 2024. If that happens, how will companies protect their trade secrets, confidential information, customer goodwill, and the integrity of their
As readers of this blog already know, the Federal Trade Commission issued a final rule banning the use of most employee noncompetes throughout the United States. It’s estimated that this new rule will impact at least 30 million employment contracts, including even confidentiality agreements and other forms of employee restrictive covenants. Several lawsuits, including
Yesterday afternoon, as expected, the Federal Trade Commission (FTC) announced its Final Rule banning noncompetes throughout the United States during an open hearing available to the public. The FTC’s Final Rule is more measured than the proposed rule announced on January 5, 2023 in several key respects–most notably, (1) nonsolicitation agreements are not prohibited, with some caveats explained below and (2) nondisclosure agreements (NDAs) seem to be on somewhat better footing, as the FTC has abandoned its proposed de facto noncompete test, also with some caveats below. Not unexpectedly, the vote broke down along party lines, 3-2, with the Democratic commissioners voting in favor and the Republican commissioners voting against it. The Final Rule is not yet effective, and the U.S. Chamber of Commerce has already filed a lawsuit challenging it today. Many commentators (including yours truly) believe the Final Rule will not survive that litigation. And while it is an inherently political rule, it does provide some lifelines for employers eager to protect their trade secrets and customer relationships. Here are my preliminary thoughts on what employers and employees need to know.Continue Reading The FTC’s Final Rule Banning Noncompetes: It could have been a lot worse
On Thursday, March 14, 2024 and Friday, March 15, 2024, I will be speaking at the AIPLA 2024 Trade Secret Summit on three panels. The Trade Secret Summit has become one of the premiere trade secret law events, with thought leaders and trade secret experts meeting to debate and discuss key developments in trade secret
On Wednesday, March 6, 2024, I will be speaking at the State Bar of Georgia ICLE – Restrictive Covenants and Trade Secrets CLE on a panel entitled “The Assault on Noncompetes: Update on FTC, NLRB and State Efforts to Ban or Curtail the Use of Noncompetes.” I am going to be presenting with Rachel P.
On Tuesday, January 30, 2024, I will be giving a one-hour Webinar/CLE for the Ohio State Bar Association (OSBA) entitled “Trade Secret and Restrictive Covenant Law Year in Review.”
As readers of this blog know, the number of trade secret and restrictive cases continues to grow each year. As a result, trade secret disputes and