A federal judge blocked implementation of the Federal Trade Commission’s (FTC’s) ban on noncompete agreements shortly before the September 4 effective date.
The rule would have stopped enforcement of noncompete agreements, including those executed before September 4. There were limited exceptions for existing noncompetes with senior executives and for noncompetes with owners of a business that is being sold.
The FTC may appeal the ruling, but the new Supreme Court decision in Loper Bright Enterprises vs. Raimondo could impact any higher court decisions. A core argument in the lawsuit against the FTC noncompetes ban has been that Congress did not grant the agency the authority to implement such a ban. Under the Loper Bright decision, courts can no longer give deference to agencies’ reading of the law and must independently interpret statutes.
At the end of July, the Senate took a procedural vote on the House-passed Tax Relief for American Families and Workers Act of 2024 (H.R. 7024) but failed to move forward. The legislation addresses a key ACEC priority by delaying the research and development (R&D) amortization requirement until 2026. Other provisions in H.R. 7024 include a delay of the limits on interest deductibility and the full expensing of capital equipment purchases. The package also expands the child tax credit, with an emphasis on low-income families.
Depending on the election results, it is possible that the Senate could vote again on H.R. 7024 before the end of 2024. If Congress does not move tax legislation during the lame duck session, a fix for R&D amortization could be in the mix during the 2025 tax debate over the expiration of significant portions of the 2017 tax reform law. These include the Section 199A passthrough tax deduction and lower individual tax rates, among other provisions. The corporate tax rate is also expected to be part of that debate.
ACEC is continuing to work with coalition allies to push for the earliest possible fix for R&D amortization.
For legislative news, visit ACEC’s Last Word blog at www.acec.org.