Not Dead Yet: Noncompetes Survive, The FTC Rule Doesn't (For Now)

Perhaps there has been no employment law topic written about more in 2023, and to-date in 2024, than the Federal Trade Commission's (FTC) (Proposed) and Final Rule, which broadly (and arguably, unconstitutionally) seeks to ban noncompete clauses between employers and their workers. And for good reason. The FTC's Final Rule represents a sea change in the regulation of noncompetes, which have historically been governed by state law for more than a century (and have existed long before Congress established the FTC). The Final Rule is an extraordinary exercise and test of the FTC's legal authority to regulate unfair methods of competition.

As anticipated, the Final Rule has been met with swift legal challenges attempting to block its implementation, with many questioning the FTC's rule-making authority, and whether it would survive in the courts. To date, those legal challenges have been successful (albeit limited). On July 3, 2024, the court in Ryan LLC v. FTC granted