Screw You Guys, I'm Going Home
The long-awaited rule from the Federal Trade Commission regarding noncompetes was released yesterday, and it's a doozy. The FTC "has determined that it is an unfair method of competition, and therefore a violation of Section 5 of the FTC Act, for employers to enter into noncompetes with workers and to enforce certain noncompetes."
You can safely assume there will be lots of litigation over this new rule. And I wouldn't hold my breath that the Supreme Court in its current makeup will uphold it. Meanwhile, until a court says otherwise, the rule is in place. What does it mean?
Effective date: The rule isn't effective until 120 days after publication in the Federal Register, so presumably that will be from yesterday. That means the rule will be in effect on August 21, 2024.
Existing noncompetes: Most of them are now deemed illegal and unenforceable, except those involving "senior executives," defined as those earning more than $151,164 who are in a “policy-making position”. But most noncompetes are illegal anyhow, with or without the rule, in my opinion. There are many defenses to noncompetes that exist even if this rule is tossed, and that can help people who are waiting for the effective date.
