FTC Rule Banning Non-Competes Preliminarily Enjoined, But Not Dead Yet

The Federal Trade Commission published final rules banning the enforceability of most non-compete clauses with workers in the United States, and barring entering into any non-compete clause after the effective date, after concluding that such non-complete clauses constitute methods of unfair competition. The Rules become effective September 4, 2024, unless pending litigation in the United States District Court for the Northern District of Texas determines that the Rules are invalid and not enforceable. As discussed in this article, first published in the IPOwners Quarterly on July 16, 2024, this is a major change in the law for most states and has the potential to shift protection of intellectual property rights previously afforded by non-compete clauses to trade secret and other forms.