U.S. District Court Invalidates FTC Non-Compete Rule
On August 20, 2024, U.S. District Judge Ada Brown of the Northern District of Texas entered an order granting summary judgment in Ryan LLC, et al. v. Federal Trade Commission ruling that the FTC Non-Compete Rule is unlawful and must be set aside.
The FTC Non-Compete Rule attempted to ban most noncompete agreements as “unfair methods of competition,” and was scheduled to take effect on September 4, 2024. As described in our July 5, 2024, client alert, Judge Brown previously entered a preliminary injunction staying the effective date of the Rule, but that initial ruling only applied as to the plaintiff and intervenors in Ryan. But Judge Brown’s new and final Order stays the effective date of the FTC Non-Compete Rule entirely and directs that it “shall not be enforced or otherwise take effect” as to any persons or entities nationwide.