The O'Connor Group’s Post

FTC Bans Non-Compete Clauses: Is this a Game-Changer or Disaster? On April 23, 2024, the FTC issued a Final Rule banning all non-compete clauses in employer-worker agreements. Talk about shaking things up! Over 26,000 public comments poured in during the notice period - clearly, this is a hot-button issue. This new rule is essentially a divide-and-conquer strategy. For new non-competes, it's a total ban. For existing ones, it's a bit more nuanced. 🔷 New non-competes? Forget about it. Any agreement post the rule's effective date will be seen as unfair competition. 🔷 Existing non-competes? They get a lifeline but only if you're a 'senior executive'. But remember, no extensions or new agreements once the rule is in place. Say bye-bye to non-compete clauses if you're not in the 'senior executive' club. Plus, employers must notify workers about the ineffective non-competes by the rule's effective date. But wait, there's a twist! And it may delay enforcement. On April 24, 2024, the Chamber of Commerce, along with other business groups, filed a lawsuit in the U.S. District Court for the Eastern District of Texas. They argue that the FTC lacks the legal authority to issue binding regulations that prohibit "unfair methods of competition." More lawsuits may be filed in the coming weeks. Is this rule a game-changer or disaster for businesses? And will the FTC's ban survive the legal challenges? #FTCRules #NonCompete #BusinessImpact #LegalBattle

We’ve been following the FTC’s attempt to ban non-competes closely, and yesterday’s ruling striking down the FTC ban comes as no surprise. We’ve always recognized that the ban was an overreach by this federal agency, acting outside the scope of its authority. The FTC’s core mission is to protect consumers from fraud, not to legislate employment contract rules. The timing of the FTC's rule always seemed more political than practical, creating unnecessary disruption for professionals, executives, and businesses alike. We’re not opining on the specifics of this ruling itself—we expected the FTC’s ban to be struck down due to a lack of authority. But the political nature of the move has caused unnecessary disruption. There will be appeals. This topic will remain in the news for sometime. Professionals, executives, and businesses are left wondering what the law will be next month or under the next presidential administration. This may be an example of a benefit to explicitly overruling Chevron and not deferring to the future changing views of federal agencies - which might actually provide some stability in the law for non competes and employment agreements. At our firm, we understand the real benefits and burdens of non-competes for both sides. The real issue isn’t non-competes themselves, but their misuse by some employers. The best way to address this? As we’ve said, pass a law that penalizes employers who abuse or misuse these agreements by awarding monetary judgments and attorneys' fees to the affected employees. The best path forward? Sensible laws or regulations that protect employees from overreaching employers and that protect employers’ true legitimate business interests. But nobody asked me. 🤷♂️ #noncompete #noncompeteban #ftc

The FTC Non-Compete Ban is evolving, and employers need to stay informed. Our latest blog covers the recent court decisions and outlines a clear action plan for compliance. Discover key dates and practical steps to ensure your business is ready for the September 4 effective date. Don't miss out on this essential update. #EmploymentLaw #FTC #NonCompeteBan #BusinessCompliance #LegalUpdates https://lnkd.in/eapyXCVr

An estimated 18% of U.S. workers are subject to non-competes, and this new FTC rule will affect every one of those employees and their employers. The new rule effectively bans any new non-compete agreements, and it even impacts existing employment agreements that contain non-compete restrictions by requiring employers to notify employees that those non-compete restrictions are no longer enforceable. Employers across the country will need to closely monitor this new rule and the anticipated legal challenges to it.

Breaking News: The Federal Trade Commission issued the Non-Compete Clause Rule, calling for a comprehensive ban on #noncompetes nationwide, concluding non-competes are an “unfair method of competition and therefore a violation of Section 5 of the Federal Trade Commission Act.” Threats of legal challenges have surfaced. Just hours after the final rule, which would go into effect later this year, the U.S. Chamber of Commerce announced it would sue the FTC to block the rule from going into effect. Our Adams and Reese attorneys Matt Jackson, Timothy Brinks, Hunter Schoen, and Evan Gaudet discuss the requirements under the FTC rule and alternative measures that employers can implement to protect their #business interests in light of the rule taking place. Read more >> https://lnkd.in/gxGj8yAR #EmploymentAgreements #FTC #FinalRule #NonCompeteAgreements #Employers #LaborLaw #TradeSecrets #ConfidentialityAgreements

FTC's ban on noncompete provisions will likely have to overcome many legal challenges in the coming months. Until we know what its ultimate fate is, this will impact every industry, every business, ever employer, and every employee. Spencer Fane LLP can help you navigate the complexities and consequences of this new rule - reach out to us with questions!

FTC - NON-COMPETES Delayed ----As PREDICTED - from my previous post-  https://lnkd.in/e44bSpTa - there are now multiple court actions and lawsuits attempting to block enforcement of the recent FTC ban on non-compete clauses.   In the article from the firm of Holland & Knight LLP - the authors (David Santeusanio, Bryan Neal, Sara Schretenthaler Staha, Howard Sokol, Jasmine M. Tobias), first analyze a Texas district court order of Wednesday July 3rd (Ryan LLC v. Federal Trade Commission) - then discuss several other pending actions against the non-compete ruling.   MY TAKE: In HEALTHCARE - For doctors and other practitioners subject to non-compete clauses - who are trapped in abusive and toxic workplace conditions (conditions promoted by these non-compete clauses) - now with no way out except to LEAVE a city and possibly the State in which you and your family reside and have become firmly established and connected  - and MOVE to a distant local, thus profoundly DISRUPTING your financial stability, and disrupting the life, connections and relationships  you, your spouse, your children  have established throughout your living system.   Managements know this well - and uses this as leverage to keep you from leaving – as well as not feeling any need to improve abusive healthcare workplace conditions.     – Thus, such delays and a possible cancelling of the FTC’ non-compete ruling - ALLOW these non-compete-promoted healthcare workplace ABUSES to continue unchecked - further contributing to healthcare system workplace failures and sub-optimal patient outcomes. #toxicworkplace, #burnout, #healthcareworkers, #moralinjury, #doctors, American Medical Association American College of Emergency Physicians Tennessee Medical Association Gillian Schmitz Aisha Terry (formerly Liferidge) Alison Haddock, MD, FACEP Jonathan Fisher, MD, MPH Samuel A.A. Levine Lesley Fair Rahul Rao Tara Isa Koslov Lina Khan Doug Chesson Tisha Titus, MD, MPH Leon C. Adelman, MD, MBA, FACEP, FAAEM Adriana Alvarez Melissa Rudy Erika Edwards Doximity Kelley Kramer Katie Johnston Michael Arroyo Peter Stavros David Whitestone Chadd Kraus Aria Bendix Joseph Choi Ryan Stanton Sarah Owermohle Deidre McPhillips Erin Schumaker Linda Restrepo Linda Lawrence Susan Morse Thinkers360

here’s our legal alert on what the FTC final rule on noncompetes does, what it doesn’t, and what employers should do while waiting for the court challenges  https://lnkd.in/gCMrgxQi

From Tannenbaum Helpern Syracuse & Hirschtritt LLP: Even if the Rule is not upheld, the legal landscape, public opinion and employee negotiations of restrictive covenants are increasing. For example, several states have recently enacted legislation preventing or curtailing the use of post-employment noncompetes and many bills are pending. Presumably, state legislatures have paused efforts to pass state law as we all wait to see the fate of the FTC Rule. This presents a great opportunity for employers to review and update their current restrictive covenants whether the Rule is ultimately upheld or not. #ftc #noncompeteagreements #finalrule #litigation #restrictivecovenants

Employers will justifiably enjoy seeing a headline such as, "Court Temporarily Blocks FTC From Enforcing Its Non-Compete Ban," but as Michael Elkon and Jonathan Crook note here, employers are not out of the woods yet. Here are three quick takeaways from last week's ruling: (1) what happened; (2) what will happen next; and (3) what employers should do now.