In a continuation of the saga surrounding the FTC’s ban on non-compete agreements for for-profit businesses, on August 20, 2024, a ruling from the United States District Court for the Northern District of Texas struck down the FTC’s final rule. In the Texas court’s ruling, U.S. District Judge Ada Brown stated that the FTC’s authority to police unfair methods of competition couldn’t be used to issue substantive regulations that ban an entire category of conduct. According to Judge Brown, this action by the FTC exceeds its authority granted by Congress. This ruling is effective nationwide and not just limited to the Texas case.
The FTC is considering an appeal to this ruling, but for now, the FTC’s ban on non-compete agreements will not go into effect on September 4, 2024. As the situation continues to develop, we will monitor and update on this blog as further updates become available.