The FTC's historic rule banning most employment-based noncompetition agreements (the noncompete rule), and its authority to issue such a rule, were the subject of court decisions handed down in the month of July. However, the decisions by the U.S. District Court for the Northern District of Texas and the U.S. District Court for the Eastern District of Pennsylvania were in direct conflict. The conflicting decisions created even more uncertainty regarding whether the FTC has the power to issue substantive rules preventing unfair methods of competition.

On Jan. 5, 2023, the FTC proposed a rule banning the use of employment-based noncompetition agreements nationwide. Over the next 15 months, the FTC received over 26,000 public comments on the noncompete rule. The FTC issued its final version of the noncompete rule on April 23, 2024. The final rule, if it were to take effect, would prevent an employer from entering into new noncompete agreements, or enforcing noncompete agreements with any employee who is not a senior executive.