August 27th, 2024
Update: FTC Ban on Noncompetes Blocked
Posted in: Employment Law Tagged: Darla J. McClure
Author: Darla J. McClure
A ruling by a federal judge in Texas has blocked a ban imposed by the Federal Trade Commission (FTC) on noncompete agreements. U.S. District Court for the Northern District of Texas Judge Ada Brown ruled that the FTC did not have the authorization to ban practices it deemed as anti-competitive and did not have the power to effectively ban all noncompete agreements. The ban was scheduled to take effect on September 4.
Even with the FTC rule struck down, employers should take this opportunity to review their noncompete agreements, ensuring that they continue to comply with state and federal laws. The FTC has indicated, while it may appeal the ruling, it will now focus on noncompetes through case-by-case enforcement actions.
The noncompete ban, which was approved by the FTC in April, would have prohibited employers from enforcing noncompete agreements and effectively banned future use of them.
If you have any questions about the ruling or wish to discuss how best to protect your business, please contact a Stein Sperling employment law attorney.
