Legal News: Federal Judge Blocks FTC's Nationwide Ban on Noncompete Agreements for All Workers

August 21, 2024 | Labor and Employment

A federal judge in Texas has blocked a final rule issued by the Federal Trade Commission banning the use of noncompete clauses nationwide from going into effect. The final rule, which had been set to take effect on September 4th, banned new noncompete agreements for all workers and required companies to let current and past employees know previous noncompete agreement they have signed in the past would not be enforced.

U.S. District Judge Ada Brown said that the FTC lacked the statutory authority to enact the Non-Compete Rule, further stating that the Rule itself was arbitrary and capricious since it did not clearly identify specific, harmful noncompete agreements. FTC spokesperson Victoria Graham said in a statement that the decision, "does not prevent the FTC from addressing noncompetes through case-by-base enforcement actions.”

You can read more about the ruling and what it means for the enforceability of noncompete agreements here.

Concerned about what this means and how it might impact you or your business? Learn about our Labor and Employment Law department and reach out to a Belin attorney here.