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Vacation of the FTC's Final Rule Banning Noncompetes

Analysis of the FTC’s final rule and what happened to it, what attorneys need to know about state and federal enforcement actions, and what agreements can be used going forward to protect trade secrets, confidential business information, and customer and employee goodwill

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    On April 23, 2024, the Federal Trade Commission, by a 3-2 party-line vote, adopted a rule establishing an unprecedented nationwide ban on virtually all noncompete agreements. Although a federal court in Texas set aside the rule on August 20, 2024, that is not the end of the assault on noncompetes and other restrictive covenants. The FTC has already said that it will resume enforcement actions, attorneys general from six states—including Massachusetts—recently brought an enforcement action against Valvoline for its use of noncompetes signaling more to come, and Congressional and state legislative efforts to ban or restrict noncompetes continue. 

    This new program provides an overview and analysis of the FTC’s final rule and what happened to it, what comes next in that case and the two other pending cases challenging the FTC’s final rule, what attorneys need to know about state and federal enforcement actions, and what agreements can be used going forward to protect trade secrets, confidential business information, and customer and employee goodwill.

     
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