BREAKING-The FTC Ban on Non-Competes Has Been Struck Down

You may recall from our prior blog post on June 15, 2024, that the Federal Trade Commission (FTC) made a new rule essentially banning most non-compete provisions and it was set to go into effect September 4, 2024.

On August 20, 2024, a federal court in Texas blocked the FTC ban on non-competes and said the FTC had overreached its authority:

Having concluded that (i) the FTC promulgated the Non-Compete Rule in excess of its statutory authority, and (ii) the Rule is arbitrary and capricious, the Court must “hold unlawful” and “set aside” the FTC’s Rule as required under [Section] 706(2)…. As the [Fifth Circuit] put in a couple of recent cases, setting aside an agency action under [Section] 706 has a “nationwide effect,” is not “party restricted,” and “affects persons in all judicial districts equally.” Thus, the Court hereby holds unlawful and sets aside the Rule. 

The decision may be appealed, but for now, it is back to business as usual.

Here is a link to an article for further reading.