A&I Wealth Management > Blog > Business Owners and Executives > Non-competes Are Legal Again: A Sudden Shift in the Legal Landscape

In a recent podcast by The Expert Network, we shared that a 2024 Supreme Court ruling might invalidate the entire “non-compete” argument entirely. Initially, we asked, “Are non-compete agreements now federally illegal?” A recent law issued by the Federal Government may have made it impossible for employers to limit their former employees from competing with them. Then, a court decision reversed the law…

The Reversal

The latest developments indicate that non-competes are now legal again. A recent court decision has issued a nationwide injunction against the FTC rule that sought to ban non-compete agreements, causing a sigh of relief for many employers.

What Does This Mean for Employers?

The injunction means that non-competes are enforceable again, at least for now. However, the legal landscape remains uncertain as the decision is likely to be appealed and ultimately heard by the Supreme Court.

While the federal rule is on hold, state laws regarding non-competes still apply. In Colorado, in 2024, general non-competes are enforceable for employees earning an annual salary of at least $123,750, and customer non-solicits are enforceable for those earning $74,250 or more.

The Bigger Picture

The 2024 Supreme Court session has seen a shift in the balance of power between federal agencies and the judiciary. The overturning of the Chevron deference doctrine means that courts can now substitute their judgment for that of agencies when interpreting statutes, potentially leading to a decrease in agency power.

This could have far-reaching implications, not just for non-compete agreements but for all areas of regulation. It remains to be seen how this will play out, but it’s clear that we are entering a new era in American law where the role of the judiciary is expanding.

Key Takeaways

  • Non-competes are legal again, but the situation remains fluid.
  • Employers should consult with legal counsel to ensure their non-compete agreements comply with state laws.
  • The overturning of Chevron deference could lead to a decrease in agency power and an increase in the importance of the judiciary.
  • This is a developing story with potential implications for all areas of regulation.

Stay Tuned

The Expert Network podcast will continue to monitor developments in this area and provide updates as they become available. In the meantime, if you have any questions or concerns about non-compete agreements or other employment law matters, please don’t hesitate to contact us.

You can also listen in to podcast #103, Non Competes Are Legal Again, for more details.

Disclaimer: The information provided in this blog post is for general informational purposes only and should not be construed as financial or legal advice. Please consult with a qualified professional for advice regarding your specific situation.

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    About the author

    Karl Frank, Certified Financial Planner ®, MSF, MBA, MA, is the President of A&I Financial Services LLC, a local business that specializes in wealth management, insurance planning, and retirement planning. Karl cares for business owners and the businesses that care for them. Learn More about Karl.