As you may recall, earlier this year we reported that the Federal Trade Commission (“FTC”) issued a final rule banning non-compete agreements for all workers.  The rule was to take effect on September 4, 2024.  However, on August 20, 2024, a federal court struck down the ban deeming it unlawful.

Specifically, in Ryan LLC v. Federal Trade Commission, the United States District Court for the Northern District of Texas issued an order concluding that the FTC exceeded its authority in enacting the non-compete ban and enjoined the final rule permanently.  The court’s decision prevents the rule from taking effect and therefore, employers may continue to use non-compete agreements.

There has been a focus on non-competes recently on both the federal and state levels and the FTC might continue to attempt to enact a ban on them in the future.  Thus, employers should proceed cautiously when using non-compete agreements and may want to consider using alternatives to non-compete clauses in their employment agreements.  Should you have any questions, please contact Ali Law Group.

HRtelligence was created by the team at Ali Law Group, LLC.  Should you have any questions or need assistance, please contact Ali Law Group.

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