With the Federal Trade Commission’s announcement of the ban on non-compete agreements two weeks ago, the big question remaining was when the ban would become effective. The FTC ban itself stated that it would go into effect 120 days from the date that the rule was filed and published with the Federal Register. Most publications just reported the 120 day deadline, but we didn’t have official word on when the rule would be published and trigger that timeframe.
Just a few days ago, the FTC announced that the rule would be published on May 7, 2024. That means that September 4, 2024, 120 days later, is the new date for when the FTC ban on non-competes will take effect.
Of course, the rule only goes into effect if a federal court does not issue an injunction in the meantime, which would place the rule on hold while the lawsuits filed to oppose the rule continue. At this point, the federal court in Texas that’s handling the first filed lawsuit has set a deadline of June 19 for the parties to that lawsuit (including the FTC) to finish their filing of written legal arguments. The court will decide from there whether to schedule a hearing for oral arguments, or whether the court will just rule on the written arguments.
It’s possible, under that timeline, that the trial court will issue its ruling as early as July 2024. An appeal to the court of appeals will surely follow, regardless of outcome.
in the meantime, my advice in general would be for SC employees to continue operating as though the rule doesn’t change anything, because it doesn’t just yet. I regularly consult with SC employees regarding the enforceability of their non-compete agreements, so if you have any questions, feel free to reach out to schedule a consultation.
