By: Sally A. Piefer

As indicated in our April 2024  and August 2024 E-Alerts, the FTC issued a Final Rule which would have made nearly all employment-related non-compete agreements unenforceable. The Final Rule was slated to go into effect in September 2024. In addition to making most non-competes illegal, the Final Rule required employers to provide written notice to employees who were subject to the offending non-compete agreements.

Almost immediately lawsuits were filed opposing the FTC’s Final Rule. A preliminary injunction prohibiting the Final Rule from taking effect was issued in two significant cases. The Biden-era FTC appealed those rulings, but the cases hung in the balance when President Trump took office.

In March 2025, the FTC filed motions to stay the two ongoing appeals. Last week, the FTC moved to dismiss the pending appeals filed by the Biden-era administration. The courts are almost certain to grant those requests.

What does this mean for employers? Employers may continue to rely on applicable state law to determine whether restrictive covenants are enforceable. However, we caution employers that restrictive covenants are not intended to be one-size-fits-all, and these agreements should be carefully drafted so that they are as narrow as possible. Furthermore, employers should check on state law to determine whether has any specific requirements – a growing number of states have imposed written notice requirements before asking an employee to sign a restrictive covenant agreement – and the states are not uniform in their approach or application of these notice requirements. Several states, such as Minnesota, have also implemented legislation which prohibit new non-competes from being signed in an employment context, while a growing number of states have also imposed restrictions on whether certain “low-wage” earners can be asked (or forced) to sign such agreements.

If you have questions about non-compete, non-solicitation and/or confidentiality agreements, please contact Sally Piefer at 414-226-4818 or spiefer@lindner-marsack.com, or another member of the employment team at Lindner & Marsack.