ARTICLE
28 August 2024

FTC Noncompete Rule Struck Down Nationwide

SH
Stites & Harbison PLLC

Contributor

A full-service law firm representing clients across the United States and internationally, Stites & Harbison, PLLC is known as a preeminent firm managing sophisticated transactions, challenging litigation and complex regulatory matters on a daily basis.  The firm represents a broad spectrum of clients including multinational corporations, financial institutions, pharmaceutical companies, health care organizations, private companies, nonprofit organizations, and individuals. Stites & Harbison has 10 offices across five states.
On Tuesday, August 20, 2024, the United States District Court for the Northern District of Texas entered an order preventing the FTC's rule on noncompetes from going into effect nationwide.
United States Employment and HR

On Tuesday, August 20, 2024, the United States District Court for the Northern District of Texas entered an order preventing the FTC's rule on noncompetes from going into effect nationwide. For the time being, employers do not need to comply with the FTC's rule, which was scheduled to go into effect on September 4, 2024.

As we described here, the Northern District of Texas preliminarily enjoined the FTC's rule in July, but only as to the plaintiffs in that case. On August 20, the court issued its final ruling on the merits. In a 27-page opinion, Judge Ada Brown held that the FTC lacked the statutory authority to issue the rule and that, even if the FTC had authority to issue the rule, the rule is arbitrary and capricious. The court accordingly "[held] unlawful" and "set aside" the rule. Unlike the court's prior preliminary injunction, the court's August 20 order has a nationwide effect.

An appeal from the FTC is likely, and lawsuits challenging the FTC's rule in Pennsylvania and Florida remain pending. We will continue to provide updates as developments unfold.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More