Not So Fast: U.S. Chamber of Commerce Immediately Sues to Stop FTC’s Non-Compete Rule from Going into Effect

May 17, 2024

Client Alerts

The U.S. Federal Trade Commission (“FTC”) voted on April 23, 2024, 3-2 along party lines, to approve a final rule banning non-compete clauses for all workers, with limited exceptions (the “Rule”). As expected, business groups immediately took action to block its implementation. A day after the Rule was approved and before most business owners and employees even had time to determine the impact of the new Rule, the U.S. Chamber of Commerce (“Chamber”) filed suit in the Eastern District of Texas asking for an order setting it aside. Shortly thereafter, the Chamber also intervened in a separate lawsuit filed by a private business, moving to stay the effective date of the Rule and for a preliminary injunction preventing it from taking effect. Employers will need to await the outcome of these challenges, and any appeals thereof, to determine whether the Rule will be enforced.

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