Non-Compete Rule Blocked by Texas Federal Judge

So let’s back up, in case you have not been on planet earth for the past six months. On April 23, 2024, the Federal Trade Commission issued a final rule banning noncompete agreements.  The Final Rule required employers to notify all employees who have a non-compete that effective September 4, their non-compete, with few exceptions, was invalid – regardless of the consideration an employer paid for such non-compete. The Final Rule further prohibited, again, with few exceptions, the entry of new non-compete agreements. 

Now, as you can imagine, there were a number of challenges to the new rule. Some of these lawsuits upheld the Final Rule, while others did not – but only for the plaintiffs that brought the suit.

And so, we waited. And we drafted the notices that we would likely have to send to employees and former employees. Well wait no more. Yesterday evening a Texas federal judge issued a nationwide injunction on the FTC’s Final Rule. She held that the FTC did not have authority to publish rules relating to unfair competition, including non               -compete agreements.

So there you have it. 

What does this mean for your non-compete agreements? They remain intact … For Now. 

 Have questions? As always, Loutel can help.