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.
The McDermott+ Check-Up features updates on healthcare legislative and regulatory activities that could impact health insurers, group health plan sponsors, healthcare providers and others in the health benefits industry. This post covers a recent Federal Trade Commission report on anticompetitive behaviors by pharmacy benefit managers as well as recent Senate hearings on medical debt and healthcare transparency.
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.
With the Federal Trade Commission’s Final Rule that would ban noncompetes nationwide set to go into effect on September 4, 2024, assuming pending litigation doesn’t cause any delays, employers should begin planning now to address any potential compliance concerns. Legal and human resources teams will need to consider the impact of the Final Rule on current noncompete agreements, requirements for providing notice to impacted employees under the rule, and strategies for implementing pending and future agreements if the rule is upheld.
During this recent webinar, McDermott Partners Andrew Liazos, Brian Mead and Heidi Steele discussed what employers should consider in the evolving landscape of noncompete agreements. With the Federal Trade Commission’s Final Rule that would ban noncompetes nationwide set to go into effect on September 4, 2024, assuming pending litigation doesn’t cause any delays, employers will want to develop a game plan to navigate these issues both in the short and long term.
On April 26, 2024, the Federal Trade Commission (FTC) issued a final rule to amend its Health Breach Notification Rule (HBN Rule). The HBN Rule works as a compliment and counterpart to the breach notification requirements established under the Health Insurance Portability and Accountability Act (HIPAA) for HIPAA-regulated entities. Specifically, the HBN Rule requires that vendors of personal health records (PHRs) and related entities that are not covered by HIPAA notify individuals, the FTC and, in some cases, media outlets of a breach of unsecured personally identifiable health data. Stakeholders should carefully review the final rule to understand how organizations will be impacted.
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.
During a recent webinar, Paul Hughes, Brian Mead and Katharine O’Connor shed light on pressing questions about the Federal Trade Commission’s (FTC) rule preventing all employers from using noncompete clauses. They explained the impact of the Final Rule on current noncompete agreements, examined the legal issues around enforcing a noncompete ban and ensuing litigation, and outlined what employers should do next.
On April 23, 2024, in a move that will have significant ramifications for employment contracts and intellectual property (IP) rights, the Federal Trade Commission (FTC) issued a rule banning all future noncompete agreements nationwide with limited exceptions. The rule marks a pivotal moment for trade secret protection and enforcement strategies as it promises to reshape the relationship between employers and employees and impact safeguards for proprietary information.
Noncompete agreements have long been used to temporarily restrict employees from working for a competitor or starting a competing business after leaving an employer. These agreements are often used to protect a company’s IP by prohibiting employees from taking and/or disclosing proprietary information, such as customer lists, to competitors.
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)
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