GRAND RAPIDS, Mich. -- The Federal Trade Commission and the Department of Labor have announced final rules this week that would impact most employers later this year.
But employment attorney Mark Smith with the Rhoades McKee PC law firm in Grand Rapids tells us he expects an injunction to be filed to prevent or delay that from happening.
"Almost 33-million employees across the United States are subject to non-compete agreements," Smith said in a telephone interview with WOOD Radio News.
The DOL rule would change the salary floor, effective July 1.
"That will require employers to scramble pretty quickly, if they're going to have to increase the level of salary paid to their exempt employees," he said.
Smith added that non-compete agreements would be banned for all private-sector employers, except for existing agreements with senior executives making $151,164 annually, "and has policy-making authority. It's a pretty small group," he said.
The regulation defines it as a president, a CEO, or someone with similar authority.
Smith expects a preliminary injunction will be filed to prevent the rules from taking effect - at least, anytime soon.
"I expect that the courts are going to grant the injunction, and that this rule isn't going to impact anybody for months, if not years," he said.
The process for administrative rules to take effect typically entails an agency announcing a final rule. Smith said it then sets an effective date. And, in this case, they set the effective date as 120 days after it gets published in the federal register. That hasn't even happened yet. But it will. And it would be 120 days from then," he explained.
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Employment attorney Mark Smith with Rhoades McKee PC.Photo: Source: Rhoades McKee PC, via Clark Communications.