On August 20, 2024, the Federal Court in Texas issued a final ruling on the FTC’s Non-Compete Rule stating that the FTC “(i) promulgated the Non-Compete Rule in excess of its statutory authority, and (ii) the Rule is arbitrary and capricious. ” The Court held the FTC’s Non-Compete Rule was unlawful. The Court ordered that the FTC shall not enforce the Rule and the Rule shall not take effect on September 4, 2024. Therefore, employers can continue to enter into non-compete agreements with their employees in accordance with applicable state laws.
For background on the FTC’s Non-Compete Rule, see our May 2024 Employment Law Update.