In a recent legal development, a federal judge in Texas has ruled against a proposed rule by the U.S. Federal Trade Commission (FTC) that would have banned noncompete agreements. This decision is particularly relevant for business owners, employers, and high-earning employees, as it directly impacts how businesses can protect their interests.
What Are Noncompete Agreements?
Noncompete agreements are contracts that prevent employees from working for competitors or starting similar businesses for a certain period after leaving their current employer.
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Last-Minute Ruling Saves Non-Competes
Confused about what is going on in the land of non-competes? You’re not alone.
In short:
- April 23, 2024: the Federal Trade Commission (FTC) adopts a rule banning non-compete clauses (the “FTC Rule”), originally set to go into effect September 4, 2024.
- Also on April 23, 2024: Ryan, LLC, a tax firm in Texas, filed a lawsuit in federal court in the Northern District of Texas, challenging the FTC Rule.
- April 25, 2024: ATS Tree Services, LLC filed a
Federal Court Strikes Down FTC’s Ban On Non-Competes
On August 20, 2024 the federal district court for the Northern District of Texas struck down the Federal Trade Commission’s ban on non-compete agreements, which was set to take effect on September 4, 2024. The court had previously granted relief from the FTC rule only for the plaintiffs in Ryan LLC v. Federal Trade Commission. However, this week’s ruling provides that the FTC cannot enforce the rule against any employer in the country, and the rule will not go
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FTC Non-Compete Ban Struck Down
A federal court judge has issued an injunction barring the Federal Trade Commission from implementing its non-compete rule slated to go into effect on September 4, 2024. The FTC rule banned most non-compete clauses in employment agreements and required, among other things, that employers provide all employees subject to a non-compete clause with notice that the employer could no longer enforce it. The FTC rule is now a nullity unless the FTC successfully appeals the ruling, which could take
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Court Strikes Down Nationwide FTC Final Rule Banning Nearly All Non-Competes
Employers across the U.S. can breathe a sigh of relief. A federal court in Dallas, Texas stopped the Federal Trade Commission’s Final Rule banning almost all non-competition agreements. The case is Ryan LLC v. Chamber of the United States of America et al. (N.D. Tex., Case No. 3:24-cv-00986-E; Documents 211 [opinion] and 212 [final judgment]). Although an appeal by the FTC is likely, employers can stop worrying about the September 4th effective date of the Final Rule, which is
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NCAA Adopts New NIL Legislation for Coming Academic Year
On August 1, 2024, the NCAA’s new Bylaw 22 went into effect. With this change, the NCAA has adopted new bylaws for the upcoming academic year. Notably, the new bylaws change legislation regarding name, image, and likeness (NIL). The new bylaws supersede the NCAA’s Interim NIL Policy and subsequent guidance that was put in place in July of 2021, and updated periodically thereafter. The new bylaws provide more clarity and direction–and perhaps finality–on several NIL-related issues, including the level
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Title IX Regulations
STATE OF KANSAS, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF EDUCATION, et al., Defendants (Case No. 24-4041-JWB)
In April 2024, the Department of Education (DoE) issued final Title IX rules that apply to complaints of sex discrimination occurring on or after August 1, 2024. Shortly thereafter, a number of states and organizations challenged the implementation of the final rules.
In State of Kansas, et al, v. United States Department of Education, the plaintiffs filed action against the DoE
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The FTC’s Ban on Noncompetes Remains Imminent for Most Employers as Legal Challenges Continue
On July 3, 2024, a federal judge in Texas granted a preliminary injunction in a lawsuit challenging the FTC’s noncompete ban. Notably, the injunction only applies to those plaintiffs named in the suit. All other employers will still need to comply with the noncompete ban when it takes effect in September. A final decision on the case is expected to be issued by the end of August and could have broader implications.
Another lawsuit challenging the noncompete ban
Continue Reading The FTC’s Ban on Noncompetes Remains Imminent for Most Employers as Legal Challenges Continue
Update on Federal Trade Commission’s Ban of Almost All Non-Competition Agreements
September 4, 2024, is the effective date of the Federal Trade Commission’s (“FTC”) Final Rule banning nearly all non-competition agreements. The litigation filed to stop the rule is percolating through the courts. This blog post will provide a brief update on the litigation and recommendations for employers. For a refresher on the Final Rule, our prior blog post addressing the highlights of the FTC’s Final Rule on non-competition agreements is here.
Two lawsuits remain active. On April 23,
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NIL Litigation Heats Up with Two Major Cases
College athletics has been in a state of constant regulatory change since the NCAA’s decision to permit athletes to monetize their name, image, and likeness (NIL) nearly three years ago. In addition to several rounds of NCAA NIL guidance, there have been legislative changes at the state level, introduced federal legislation, and multiple lawsuits that continue to impact intercollegiate athletics. While the NCAA and its autonomy conferences have agreed to a settlement in the House case, all involved parties
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The CTA’s Large Operating Company Exemption in Focus
The Corporate Transparency Act (the “CTA”), part of the federal government’s effort to curtail money laundering by means of shell company structures, imposes disclosure requirements on most entities registered to do business in the United States. As discussed in other Ruder Ware CTA Focus Team insights, there is a presumption that all entities are bound by these new disclosure rules. However, the CTA carves out and exempts twenty-three different categories of entities from the regime. Many of these
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Timing is Key: Navigating Due Dates of the Corporate Transparency Act for Seamless Compliance
A crucial aspect of compliance with the Corporate Transparency Act (“CTA”) is understanding the various due dates and obligations. A “reporting company” must meet CTA reporting deadlines to avoid potential regulatory penalties. To avoid such penalties for non-compliance, a reporting company must plan ahead to ensure there is sufficient time to conduct CTA analysis, gather beneficial ownership information, and update any outdated corporate records.
1. Initial Reporting Deadline:
CTA requires a reporting company to submit Beneficial Ownership Information (“BOI”)
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The Corporate Transparency Act and Its Impact on Trusts
Trust stakeholders are subject to Corporate Transparency Act (“CTA”) obligations under specific circumstances. Under CTA, a “reporting company” must disclose information about the company and its “beneficial owners.” CTA defines a “reporting company” as any entity that is created by filing a document with a secretary of state or any similar office. A “beneficial owner” is defined as any individual who, directly or indirectly, (a) exercises substantial control over a reporting company or (b) owns or controls at least
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Can’t Compete With Confusion
Non-compete agreements have been in the news lately because the FTC “banned” them. Yeah, it was in the boring section in the news, but I know I’m not the only one who saw it – as we’ve had questions. First, the FTC issued a final rule. That’s an administrative rule, not a law, but lots and lots of rules have a big impact. Don’t believe me? The IRS, FCC, and FDA are all rule machines. I’m guessing you
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Non-Compete Agreements in Illinois
Non-compete agreements in Illinois may be up in the air due to recent and future rulings. The recent decision by the Federal Trade Commission (FTC) to ban non-compete agreements nationwide sent shockwaves through the American workforce. While this ruling has significant implications, the situation for Illinois employers and employees remains somewhat murky. Here’s a breakdown of what you need to know:
The FTC’s Non-Compete Ban: A National Shakeup
The FTC voted to enact a rule prohibiting employers from imposing
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Stafford Rosenbaum Attorneys Present on Wisconsin Fair Dealership Law for State Bar CLE
Attorneys Erin Deeley, Matthew Fisher, and Isaac Brodkey will present “Wisconsin’s Fair Dealership Law: 50 Years and Counting 2024” to an audience registered through the State Bar of Wisconsin. The presentation will give an overview, key developments since 1974, the current landscape of WFDL decisions and developments, and open WFDL issues that could be addressed in the future. Attendees will also learn about:
- The purposes of the WFDL
- What qualifies as a dealership?
- What qualifies as a