Patrick J. Barrett
402.978.5245pbarrett@fraserstryker.com email Patrick
On August 20, 2024, a U.S. District Court (Northern District of Texas) Judge struck down the Federal Trade Commission’s (“FTC”) ban on non-competition agreements scheduled to take effect on September 4, 2024. Judge Ada Brown ruled that the “FTC’s promulgation of the rule is an unlawful agency action.” She reasoned that the FTC had exceeded its authority with a Rule that would have voided contracts that bar employees from moving to rival employers. She held that the FTC lacked the statutory authority to issue such a Rule. Accordingly, the FTC’s ban will not go into effect.
Individual state restrictions on non-competition agreements such as those in Nebraska, will remain in effect. The decision may be appealed to the Fifth Circuit Court of Appeals and, ultimately, the issue may be decided by the United States Supreme Court.
If you have questions regarding this or other labor and employment-related legal issues, reach out to our Labor and Employment Law team for assistance.
This article has been prepared for general information purposes and (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. Always seek professional counsel prior to taking action.