Legislative Alert – Federal Court Issues Nationwide Order Striking Down FTC Non-Compete Ban
On August 20, 2024, a federal court in Texas issued a NATIONWIDE order striking down the Federal Trade Commission’s (“FTC”) ban on non-competition agreements. The court held that the FTC’s non-compete ban was unlawful as the FTC exceeded its statutory authority, abused its discretion, and acted arbitrarily and capriciously. This means that companies nationwide will NOT have to comply with the FTC’s non-compete rule which was originally scheduled to go into effect on September 4, 2024. Companies will still need to ensure that any non-compete provisions and other restrictive covenants continue to comply with state law.
Even though the court struck down the FTC’s non-compete ban, workers are now hyper-sensitive to this issue. I believe it is important for companies to review their hiring procedures in order to determine if non-competition restrictions are truly needed to prevent unfair competition when a worker leaves or if fairly worded non-solicitation and confidentiality provisions will be sufficient to protect the company’s business.
Do not hesitate to be in contact if you would like to further discuss this non-compete issue or any other business issues that you may be dealing with.
Do you have a question about this Legislative Alert?
Schedule a free consultation today.
FREE 30-MINUTE CONSULTATION
Schedule your free no-obligation consultation today!
Chris Corpus
Founding Partner at Corpus Law Inc
This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at 216-973-2475. Copyright Christopher A. Corpus 2024.
