In a recent G2 Intelligence article, I discussed the Texas court ruling halting the ban on non-compete agreements issued by the Federal Trade Commission (FTC) in 2024. While the FTC plans to appeal the decision, employers should be aware of the issues surrounding non-competes in order to stay compliant with the law.
In response to the announcement appointing Andrew Ferguson as the next FTC, I commented “Commissioner Ferguson has previously expressed his opposition to the noncompete rule and on December 4 issued a dissenting statement in which he claimed the FTC ‘wildly exceeded’ its authority in issuing the rule. I expect with this change in leadership, the FTC will abandon the pending appeals. However, according to the docket activity, the FTC is moving forward with its appeal for now. The FTC filed a Record of Appeal on November 25, 2024, and it filed its appeal brief on January 2, 2025—before the administrative change.”
I cautioned that while the appeals process plays out, employers should continue to be aware of the “myriad of state laws which set forth strict limits on an employer’s ability to restrict post-employment competition, especially within the healthcare industry.” As an alternative to non-compete agreements, I noted that “employing the protection of a strict confidentiality provision and intellectual property laws may be sufficient to protect against unauthorized disclosure of proprietary information.”
The full article, “FTC’s Ban of Noncompete Agreements Halted,” was published by G2 Intelligence and is available online (subscription required).