On September 4, a brand new Federal Commerce Fee (FTC) rule is ready to take impact that may ban non-compete clause. In a number of weeks, America will usher in a world the place employers cannot prohibit workers from working for rivals, however that is not occurring. A federal choose blocked the ban on Tuesday.
The Federal Commerce Fee has been learning non-compete points for years. It first proposed guidelines towards them in 2023, saying Official ban in April.
“Non-compete clauses preserve wages low, stifle new concepts, and deprive the U.S. financial system of vitality, together with the greater than 8,500 new startups that may be created annually if non-competes have been banned,” stated FTC Chairman Lina M. Khan. vitality. Said at that time. “The FTC’s last rule banning non-competes will guarantee Individuals have the liberty to pursue new jobs, open new companies, or carry new concepts to market.”
The rule will take impact 120 days after being entered within the Federal Register and can remove current non-compete provisions. The U.S. Chamber of Commerce strongly opposes the ban and has pledged to take authorized motion.
The chamber discovered prepared plaintiffs in Texas, and U.S. District Decide Ada Brown of the Northern District of Texas dominated in its favor.
“The court docket stayed the non-compete rule… which is probably not enforced or in any other case efficient on or after September 4, 2024,” Brown stated in her report. short ruling.
The chamber known as it a win for enterprise homeowners.
“This resolution is a serious victory for the Chamber of Commerce in its battle towards authorities micromanagement of enterprise selections. The FTC’s blanket ban on non-compete agreements is an illegal growth of energy that may put American employees, companies and our financial system at a aggressive drawback . said in a statement on its web site. “We stay dedicated to holding the FTC and all companies accountable to the rule of regulation and making certain that American employees and companies can thrive.”
The FTC stated it might enchantment the ruling. “We’re upset with Decide Brown’s resolution and can proceed to battle to finish non-competes that prohibit the financial freedom of hard-working Individuals, hinder financial progress, restrict innovation and drive down wages. We’re significantly contemplating a possible enchantment,” FTC tell the edge.
