[ACC Note: On August 20, 2024, the U.S. District Court for the Northern District of Texas issued a nationwide permanent injunction barring enforcement of the FTC's Noncompete Rule. The FTC will likely appeal this decision to the U.S. Court of Appeals for the Fifth Circuit.]
Learn how to respond to the FTC's new rule banning most noncompete agreements.
The FTC's final rule was issued on April 23, 2004 and is set to go into effect on September 4, 2024. However, it is being challenged in federal court.
This article from Cozen O'Connor discusses the FTC rule and how employers should respond if they have employees with noncompetes or are considering whether to implement them.
Key Takeaways:
- Review your organization's use of restrictive covenants.
- Consider what restrictions are necessary.
- Reserve the most onerous restrictions for high-level employees.
- Investigate what restrictions are typical in your industry.
- Consider linking noncompetes to benefits for key employees, such bonuses and stock options.
Author profiles: Janice Sued Agresti, Associate, David L. Barron, Member, and Aaron Holt, Members, Cozen O'Connor.
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