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

Related Content

Get Email Updates

Receive newsletters and alerts directly in your email inbox. Sign up below.
webinar promo graphic, Ideas for Coping with Labor Shortages in Light of Immigration Changes
In light of the massive enforcement efforts underway by the new Administration regarding unauthorized workers, including the termination of…
Silhouette worker
Recent changes in the composition of the National Labor Relations Board (NLRB), and government directives suggest the possibility of signif…
change neon sign
There’s a new Administration in DC, and things are changing rapidly. Executive Orders articulate new policies, there’s new leadership with…
a closet of color coordinated clothes
On his second day in office, January 21, 2025, President Trump issued an executive order titled:  “Ending Illegal Discrimination and Restor…
immigrants collecting crops
Trump's Executive Orders presently do not affect employees who are authorized to work at the present time but may affect any workers who ar…
male, femal, bathroom sign
President Trump’s Executive Order issued the first day in office requires federal agencies, including the Equal Employment Opportunity Comm…