by Jaclyn Alcantara

The Federal Trade Commission’s (FTC) Final Rule banning most non-compete agreements between employers and employees was blocked nationwide on Tuesday, August 20, 2024, by the United States District Court for the Northern District of Texas. The new rule was scheduled to go into effect on September 4, 2024. The FTC is considering an appeal.

The FTC voted in April 2024 to ban most non-compete agreements. Employee advocates asserted that the new rule would ensure worker mobility and fair competition in the job market, while many employers worried the ban would make protecting valuable company intellectual property more difficult.  You can read more about our analysis of the original FTC ruling here.

In Tuesday’s decision in Ryan LLC v. Federal Trade Commission, the judge held the non-compete ban was unreasonably overbroad and went beyond the FTC’s authorized powers.  The judge’s ruling arrives on the heels of the landmark Loper Bright Enterprises v. Raimondo, 603 U.S. ___ (2024) ruling by the Supreme Court in June.  Loper, decided a few months after the FTC’s non-compete ban was announced, gave judges broader latitude in determining whether an agency has exceeded its statutory authority.

Contact Jaclyn Alcantara with questions regarding non-compete agreements and other options for protecting your intellectual property.