A recent ruling by a Texas federal judge has blocked the Federal Trade Commission’s (FTC) attempt to ban non-compete clauses for most workers. On August 20, 2024, the judge decided that the FTC had exceeded its legal authority by trying to implement a rule prohibiting non-compete agreements, which was set to take effect in September. As a result, the FTC cannot enforce this rule nationwide, allowing employers to continue using non-competes, though they must still comply with state and local laws.
The FTC is expected to appeal the decision, potentially bringing the case before the U.S. Supreme Court. If this happens, the outcome could further shape the legal landscape for non-competes across the country. For now, businesses can continue to use these agreements, but they should remain cautious and ensure that their practices align with the varying regulations in different states.
If you need help with updating non-compete clauses in your employment agreements or need more information on this ruling, feel free to contact our team at info@mnklawyers.com
