On August 20, a district court issued an order stopping the FTC from enforcing the rule on September 4. The FTC has appealed that decision. The district court’s decision does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions.
They are not, in fact, blanket banned as we speak.
First off I never said they were “blanket banned”. I said “they were totally banned by the FTC” which is true and correct. And I said other states “also limited them significantly” which is also true and correct.
A Texas federal court ruled the FTC overstepped its bounds and has currently issued an injunction. However a federal court in Pennsylvania has ruled the opposite. Our legal system isn’t so simplistic that you could possibly interpret that as “it’s perfectly legal” as in the comment I was replying to.
In addition , in many if not most states (especially states in my opinion where innovation and economic activity matters most), most courts have ruled consistently against non-compete overreach and have precedents that do not favor non-competes.
For example § 16600 of the California’s Business and Professions Code, for the most part bans all non-competes along with civil penalties of $2500 per violation. Other states also have severe restrictions on what can be prevented in non competes, especially things not specifically related to the job the employee is hired for or outside of proven trade secrets, as has been the focus of most of the discussion here.
As can be seen on the following map the vast majority of states have restrictions on non competes.
So any attempt to intemperate the current law around non-competes in the US as perfectly legal is ill informed. I don’t know if the comments on here attempting to paint things as “non-competes are perfectly legal” is either just employees being ill informed, or employers on here trying to convince people of things they wish were true.
Short take, If a company is attempting to get you to sign a non-competes you should definitely consult an attorney. Personally I will not work for anyone attempting to get me to sign a non-compete.
On August 20, a district court issued an order stopping the FTC from enforcing the rule on September 4. The FTC has appealed that decision. The district court’s decision does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions.
They are not, in fact, blanket banned as we speak.