As we head into 2024, employers can expect more risk related to the use of restrictive covenants at both the federal and state level. From the Federal Trade Commission’s (FTC) anticipated final rule and National Labor Relations Board (NLRB) unfair labor practice charges to new state laws and court decisions, employers are monitoring the landscape, preparing to meet compliance deadlines, and reassessing their approach to noncompete agreements. Below we discuss the latest developments and what to watch for in the new year.
Federal agencies are expected to remain active
In January 2023, the FTC proposed a rule that would ban virtually all non-competes in employment agreements, with limited exceptions for noncompete clauses between franchisees and franchisors and certain noncompete clauses relating to the sale of a business. A vote on the final rule is expected by April 2024, with legal challenges likely to follow – the Chamber of Commerce has stated that it will sue the FTC if the rule goes forward.
Even if a final rule is immediately challenged … Read more
