On August 20, 2024, a Texas court ruled that the Federal Trade Commission’s (FTC) Non-Compete Rule is unlawful and ordered that it shall not be enforced.

• The Non-Compete Rule, which was scheduled to take effect on September 4, 2024, would have banned virtually all worker non-compete clauses in the United States.

• On August 20, 2024, in Ryan LLC v. Federal Trade Commission, a Texas court declared the Non-Compete Rule unlawful and ordered that the rule should not be enforced on a nationwide basis.

• The Ryan court held that the FTC had exceeded its authority by enacting the Non-Compete Rule.  

WHAT YOU NEED TO KNOW: The Non-Compete Rule will no longer go into effect on September 4, 2024, as scheduled.  Businesses can continue to enter into new non-compete agreements and enforce existing non-compete agreements with employees, subject to applicable state law requirements.

• The FTC will likely appeal this ruling.  Stay tuned for future updates.

If you have questions or concerns regarding the Non-Compete Rule, please do not hesitate to contact us.

THIS CLIENT ALERT IS A GENERAL UPDATE REGARDING LEGAL CHALLENGES TO THE FEDERAL TRADE COMMISSION’S NON-COMPETE RULE. IT, THEREFORE, IS NOT INTENDED TO BE, AND SHOULD NOT BE CONSTRUED AS, LEGAL ADVICE.