The Federal Trade Commission has dropped its appeal of a court decision blocking a Biden-era rule banning most employee noncompete clauses. Instead, the Commission will police unduly restrictive noncompete clauses on a case-by-case basis, the FTC chairman stated.
On September 5, the FTC withdrew its appeal to the Fifth Circuit in Ryan, LLC v. FTC, of a district court ruling that the FTC exceeded its authority in issuing the noncompete rule, which characterized most noncompete clauses as unfair competition.
FTC Chair Andrew Ferguson said the Trump Administration will protect workers against specific anticompetitive conduct. He cited an FTC settlement that stops Gateway Services from enforcing noncompete agreements that prohibited employees – hourly workers as well as executives – from working in the pet cremation industry anywhere in the United States for one year after leaving the company.
Ferguson also said the FTC will urge firms in industries “plagued by thickets of noncompete agreements” to consider abandoning those agreements.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, should consult our resource entitled “Non-Compete Agreement Restrictions,” which summarizes state laws related to employee noncompete agreements.
CWC members can read more here.