As discussed here, on April 24, 2024, the Federal Trade Commission (FTC) moved to ban noncompete agreements for most workers effective September 4, 2024.  

The Non-Compete Clause rule was immediately challenged in federal district courts in Texas and Pennsylvania. Contradictory rulings issued in the Texas and Pennsylvania cases create the potential for a split in the district courts if either ruling is appealed, setting the stage for a U.S. Supreme Court review. However, for now, it is unlikely any subsequent challenge will delay implementation and enforcement efforts. 

What Does it Mean? 

With the September 4, 2024, effective date fast approaching, employers should begin/continue taking the following steps toward compliance: 

• Review the personnel files of current/former employees (including senior executives) for existing noncompete agreements and agreements containing non-compete provisions. 

• Work with legal counsel to prepare required notifications to any impacted individuals. 

• Consider whether alternative protections such as confidentiality and nondisclosure agreements, invention protection and/or trade secret agreements are viable options to noncompete restrictions.