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FTC Non-Compete Ban Update

A recent federal court ruling added more uncertainty to the Federal Trade Commision's (FTC's) ban on non-competition agreements, which was set to go into effect in September. The end result of this ruling will have a significant effect on the ability to utilize the fair market value of non-competition agreements as part of Internal Revenue Code Section 280G calculations for golden parachute payments.

© Copyright 2024. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.

A federal judge last week backed a challenge to a nationwide ban on the pacts, which restrict workers’ ability to join rival firms. The ruling came days after the Supreme Court gave judges more latitude to challenge federal agencies’ rule-making authority. The Federal Trade Commission’s ban was set to go into effect in September. The judge, Ada Brown, said the plaintiffs in a lawsuit challenging the ban are likely to prevail in a final ruling based on their argument that the FTC lacks statutory authority to promulgate the ban, and that the rule is overly broad because it “imposes a one-size-fits-all approach with no end date.”

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taxvaluation, irc280gvaluation, 280gvaluation, noncompetevaluation, perspective, governance, risk & compliance, government agency advisory, turnaround & restructuring

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