In a significant blow to the Federal Trade Commission (FTC), a federal district court in Texas ruled that the agency overstepped its authority in issuing a ban on most non-compete agreements. The court’s decision, issued on August 20, 2024, invalidated the FTC’s Final Rule, which was set to take effect on September 4, 2024. The court concluded that the FTC lacked the statutory authority to enact such a broad ban. It also determined that the FTC’s rulemaking process was arbitrary and capricious.
The FTC may appeal the decision, but, at least for now, non-compete agreements can still be enforced, as long as they comply with applicable state laws.
If you have any questions regarding a noncompete agreement, please call Lord & Lindley, PLLC, at (704) 457-1010. For more information regarding our firm, attorneys, and practice areas, please visit our website at www.lordlindley.com.