As discussed here, on April 24, 2024, the Federal Trade Commission (FTC) moved to ban most noncompete agreements for most workers. However, as anticipated, the file rule is being challenged in two lawsuits. The suits seek, among other things, a temporary stay of the rule’s current September 4, 2024, effective date.  

Given the uncertainty of court intervention and the rule’s fast approaching effect date, employers should continue planning efforts to ensure compliance by the September deadline. A few key compliance reminders: 

• The rule – for now – only applies to noncompete agreements and does not apply to other types of restrictive agreements (e.g., confidentiality and nondisclosure agreements, non-solicitation, non-recruitment, and no-hire restrictions). 
• Employers should begin/continue reviewing employee files for any existing noncompete agreements in preparation for notifying (ahead of the September 4, 2024, effective date) all current and former employees (excluding senior executives) that any existing agreements will not be enforced against them.  
• The rule should not impact state and federal trade secret protections.