Federal Court Blocks FTC’s Non-Compete Ban Nationally

A Texas Federal judge issued a decision blocking the FTC’s proposed ban on non-compete agreements, which was set to go into effect on Sept. 4, 2024. As previously reported, the Texas Federal Court had issued a preliminary injunction limiting the enforceability of the FTC’s non-compete ban for the individual plaintiff in that lawsuit only. The judge has now expanded that ruling nationally – preventing the FTC non-compete ban from going into effect. The court found that the FTC improperly exceeded its authority by creating a new rule banning non-compete agreements. The court found that the “sweeping” rule is a “categorical ban” that is impermissible, holding: “In sum, the Court concludes that the FTC lacks statutory authority to promulgate the Non-Compete Rule, and that the Rule is arbitrary and capricious. Thus, the FTC’s promulgation of the Rule is an unlawful agency action.” This will not impact the new Pennsylvania state law on non-competes within health care.

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