Companies Delay Voiding Noncompetes With Fate of Ban Uncertain

Companies are struggling with whether to inform current and former employees that their noncompete agreements are void as the validity of the Federal Trade Commission’s ban on such contracts remains in legal limbo.

The FTC regulation set to take effect Sept. 4 will trigger this notification requirement, erasing restrictive employment contracts for potentially 30 million workers by the FTC’s estimate and barring new noncompetes going forward.

But legal challenges to the rule so far have yielded two conflicting decisions—one saying the FTC likely has the authority to issue the ban and the other saying it likely doesn’t—raising uncertainty as to ...