On April 24, 2024, the Federal Trade Commission ("FTC") in the United States passed a nationwide ban on non-competes in workplaces for jobs and industries that the FTC regulates (the "Non-Compete Ban"). The ban aimed to curb the exploitation of vulnerable workers and increase the lateral mobility of workers. For more information about the Non-Compete Ban, please see Keeping Up with Non-Competes: The State of Non-Competition Clauses in BC.
Recently, on August 20, 2024, the U.S. District Court for the Northern District of Texas, in Ryan, LLC v. FTC, issued an order prohibiting the FTC from enforcing the ban as of September 4, 2024. This ruling prevents the FTC from implementing the Non-Compete Ban against any company nationwide. At the time of writing, the FTC is considering an appeal of the Texas ruling. In the meantime, the FTC has announced its intent to address non-compete agreements through case-by-case enforcement actions.
The takeaway is that, like in Canada, the enforceability of non-competes in the United States continues to be fraught with uncertainty. Therefore, it is increasingly important to obtain legal advice when dealing with non-compete provisions.
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.
