KMK Law Management Rights Blog

This summer, eyes were focused on the Federal Trade Commission and its announced rule seeking to invalidate millions of non-compete agreements across the country. That rule was ultimately struck down in the Court, but federal efforts to invalidate non-compete agreements have continued. As previously covered by this blog, the General Counsel of the National Labor Relations Board (“NLRB”) took aim at non-compete agreements in May of 2023, announcing her opinion that such agreements could restrict employees’ Section 7 rights under the National Labor Relations Act (“NLRA”). At that time, the General Counsel directed NLRB field offices to submit cases involving non-compete agreements for further investigation. 

After a summer of speculation, businesses and individuals across the country were provided some clarity as the Federal Trade Commission’s (FTC) rule invalidating millions of non-compete agreements was struck down by a federal district court. The FTC’s rule—which largely invalidated non-compete agreements—was announced in April and set to take effect on September 4, 2024. Since that announcement, however, multiple lawsuits have been filed against the FTC, challenging its rulemaking authority to impose this sweeping new rule. In the months that followed, all eyes have been on the courts to see whether the rule would take effect as scheduled.

The Federal Trade Commission’s (FTC) push to invalidate non-compete agreements for millions of workers gained steam today, courtesy of a ruling out of the Eastern District of Pennsylvania. As noted by this blog, in April of 2024 the FTC announced a final Rule largely invalidating non-compete agreements across the country. In the aftermath of that announcement multiple lawsuits were filed against the FTC, seeking to enjoin enforcement of this Rule. 

Earlier this month, opponents of the FTC’s Rule were offered a glimmer of hope when the U.S. District Court for the Northern ...

Yesterday, the Federal Trade Commission (“FTC”) announced its long-anticipated final rule finding that the vast majority of non-compete agreements constitute unfair methods of competition, and are thus invalid. An estimated 30 million employees are covered by non-compete agreements, representing nearly one in five U.S. workers. Thus, this announced rule has the potential to significantly impact the labor market, as well as cause a shift in employers’ business strategies.