On August 20, 2024, the US District Court for the Northern District of Texas issued a nationwide injunction barring the Federal Trade Commission’s Final Rule that bans all noncompete agreements.
Read more about the court’s decision and what it means for employers and business entities here.
On July 23, 2024, US District Court for the Eastern District of Pennsylvania declined to stay the September 4, 2024, effective date of the Federal Trade Commission’s (FTC) Final Rule that bans all new noncompete agreements nationwide and renders existing noncompete agreements binding most workers unenforceable. This ruling comes 20 days after a federal court in Texas – presented with the same legal arguments – preliminarily enjoined the FTC from enforcing the Final Rule against the parties in that case.
The state of Washington has placed additional restrictions on the use of noncompetition agreements. Readers may be familiar with the Federal Trade Commission’s latest noncompete rule, which goes into effect on September 4, 2024. While that federal regulation is currently being challenged in court, Washington’s rule has already gone into effect.
On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 along party lines to ban all new noncompete agreements nationwide and render existing noncompete agreements binding most workers unenforceable. The Final Rule, slated for publication in the Federal Register, provides that employers’ use of noncompete agreements amounts to an “unfair method of competition” that runs afoul of Section 5 of the FTC Act.
COMING UP
For a deeper dive, join our multidisciplinary team of employment and antitrust lawyers for a webinar covering what employers need to know about the Final Rule and what to do next.
FTC’s Final Noncompete Rule: What It Means and Next Steps for Employers
Wednesday, May 8, 2024
Webinar | 2:00 – 3:00 pm (EDT)
The rules and regulations on workplace and employee speech, interpretation and enforcement are rapidly changing. Companies must carefully factor legal and business implications into their strategy to reach the desired outcomes for their customers, workforce and brand.
In this Law360 article, Michael Sheehan, Michelle Strowhiro and Alexander Randolph examine important considerations for companies as they navigate the complexities of workplace and employee speech.
A recent National Labor Relations Board decision will likely expose a broader range of workplace rules to regulator enforcement. According to this HR Dive article, introducing even ordinary workplace rules during unionization could draw new scrutiny. However, as Christopher Foster and Marjorie C. Soto Garcia explain, there are steps employers can take to mitigate risk.
Corporate transactions and investments involving union issues require concrete analysis of risk, contingencies and game plans. In a January 31, 2024, webinar, McDermott’s Labor and Employee Benefits Groups will focus on practical steps and strategies to successfully navigate and evaluate key considerations for transactions involving unionized businesses.
Discussion topics include:
As of December 31, 2023, all employees physically working in Chicago for at least two hours in a two-week period will earn both one hour of paid leave and one hour of paid sick leave for every 35 hours worked, pursuant to an ordinance passed by the Chicago City Council on November 9, 2023. The new ordinance expands the current ordinance, which requires employers to provide only paid sick leave to employees.
While California healthcare workers will see their pay increase over the next several years thanks to a new state law, industry analysts say more must be done to address healthcare workforce shortages. In this Bloomberg Law article, Michelle Strowhiro offers insight into the pressures facing healthcare providers.
As we enter the last quarter of 2023, here are some of the key issues impacting employers:
1. New joint employer standard: More companies will be pulled into union organizing campaigns, contract negotiations and National Labor Relations Board (NLRB) proceedings involving their contractors when the NLRB issues a new joint employer rule.
2. Increased NLRB investigations and litigation: Union elections, activism and litigation at the NLRB are spiking. So far in 2023, there has been a 16% increase in unfair labor practice charges at the NLRB and high levels of union election petitions.
3. More aggressive union activity: More companies are facing pressure to accept terms, including adoption of union “neutrality agreements” which fast-track union organizing. There has been a 72% increase in strikes in 2023. Unions are expanding their ambitions, too. Physician groups are now targeted for major union organizing campaigns.
McDermott’s traditional labor subgroup advises companies and investors on union issues across industries in the United States and Europe. The team provides cross-disciplinary advising and works seamlessly with leading McDermott partners in employee benefits, antitrust, tax, corporate and healthcare practices, among others.
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