Given the recent Texas court order blocking the FTC's ban on non-compete provisions, employers are in "wait and see" mode. Most employers have elected not to take steps to comply with the upcoming September 4 deadline due to the current uncertainty on enforcement of the rule.
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District Court Blocks Enforcement of FTC National Ban on Non-Compete Provisions
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Law360 (August 20, 2024, 6:02 PM EDT) -- A Texas federal judge on Tuesday permanently blocked the Federal Trade Commission's looming ban on noncompete agreements in employment contracts, setting aside the regulation with a conclusion that it's beyond the agency's authority. The FTC's ban on noncompete agreements in employment contracts was supposed to go into effect on Sept. 4. (iStock.com/ablokhin) In a 27-page decision, U.S. District Judge Ada E. Brown granted tax company Ryan LLC and the U.S. Chamber of Commerce summary judgment and rejected the FTC's opposing summary judgment bid. The judge found that the FTC improperly exceeded its statutory authority by creating a new rule banning noncompetes based on the FTC Act's "housekeeping rules" that lack statutory penalties, as opposed to the statute's "substantive rulemaking power" provisions.
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