Accessibility Tools

Skip to main content

Court Issues Injunction against FTC's Non-Compete Ban

Written on .

On July 3, 2024, a federal judge in Texas issued an injunction preventing the Federal Trade Commission (FTC) from enforcing its rule banning non-compete agreements, preventing the rule from taking effect in September while the court considers if the FTC has authority to issue the rule.  The judge stated: "The court concludes the text and the structure of the FTC Act reveal the FTC lacks substantive rulemaking authority concerning unfair methods of competition.  The court concludes the Commission has exceeded its statutory authority in promulgating the non-compete rule, and thus plaintiffs are likely to succeed on the merits."

Editor's Note:  It should be noted that the preliminary injunction does not apply to all employers, but only the parties to the case.  Although there is no nationwide preliminary injunction, the court sends a strong message that the FTC rule is unlikely to be upheld in court.  This result was anticipated by the FTC's Republican Commissioners, who voted against the rule, arguing in dissenting statements that the ban exceeds the agency's authority and shows an effort by the "administrative state" to make new law without Congressional approval.

This article is part of our August 2024 Newsletter. 

View newsletter online

Download the newsletter as a PDF

Get Email Updates

Receive newsletters and alerts directly in your email inbox. Sign up below.
promo graphic, Navigating the New Legal Minefield of Automated HR
Artificial Intelligence is changing how businesses hire, manage, and evaluate employees—but it is also creating a new frontier for employme…
stopwatch
In FLSA Opinion Letter 2026-1, the Department of Labor (DOL) addressed whether an employer may reclassify an exempt worker from salaried ex…
gavel, courtroom
In a recent ruling by the Eleventh Circuit Court of Appeals in Atlanta, the court stated that hostile remarks about other minorities could…
paper books
On January 22, 2026, the Equal Employment Opportunity Commission (EEOC) voted 2-1 to rescind its Enforcement Guidance on Harassment in the…
round table
Reports indicate that the new Chief Executive Officer of Walmart, John Furner, in his first company-wide memo since taking over, said he ha…
handshake
When employers attempt to settle disputes involving employment, the circumstances vary greatly as to the formality.  Most employers will no…