The Federal Trade Commission (FTC) rule scheduled to go into effect on September 4, 2024, banning the most common forms of non-compete agreements, was invalidated by a federal district court ruling on August 21, 2024. Ryan, LLC v. Federal Trade Commission, No. 24-cv-00986, U.S. District Court for the Northern District of Texas.
The ruling blocks the FTC non-compete rule from taking effect on September 4, 2024, but the FTC has indicated it still might bring specific cases without having a rule. At the same time, the National Labor Relations Board (NLRB) General Counsel and one administrative law judge find common non-compete provisions to be overbroad, and thus unenforceable, by limiting protected concerted and union-related activities. The NLRB in Washington, however, has not yet ruled on the issue.
Editor's Note: Most employers are awaiting definitive opinions and guidance as non-competes may ultimately still be enforceable, and employers know if they send revocation notices on the non-competes, it will be hard to get them back.
This article is part of our September 2024 Newsletter.
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