Michael A. Cassidy

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Businesses Challenge FTC’s Ban on Non-Compete Agreements

Michael A. Cassidy, Esq., (412) 594-5515, mcassidy@tuckerlaw.com and Adam J. Appleberry., Esq., (412) 594-5532, aappleberry@tuckerlaw.com

As expected, businesses have sued the FTC challenging the recent final rule that ends non-compete agreements, as reported by the Wall Street Journal Wednesday morning (read WSJ article here). The U.S. Chamber of Commerce challenged the final rule in federal court in East Texas, which has been joined by other business groups. A lawsuit was also filed by a tax-services firm, Ryan LLC, in Dallas.

According to the suit filed by the U.S. Chamber of Congress, courts have long understood the value of non-compete agreements for businesses in protecting their trade secrets and confidential information. When non-compete agreements are too restrictive, state governments have limited them. According to the Chamber’s suit, Congress never authorized the FTC to step in for the states to regulate these restrictive covenants.

April 24, 2024

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