Alerts
Texas Court Strikes Down FTC Non-Compete Rule
August 20, 2024
This afternoon, Judge Ada Brown of the US District Court for the Northern District of Texas issued a ruling that strikes down the Federal Trade Commission’s (“FTC”) final rule (the “FTC Rule”) prohibiting the use of noncompetition restrictions in the workplace. Judge Brown held that the FTC exceeded its authority in issuing a non-compete ban and that the FTC Rule was “arbitrary and capricious.” The Court held that the FTC Rule is “unlawful” and set the FTC Rule aside on a nationwide basis. Consequently, the FTC Rule will not take effect anywhere in the United States, and employers have no obligation to issue the notice to current and former employees regarding nonenforcement of noncompetes on or before Sept. 4, 2024 that would have been required had the FTC Rule taken effect.
Please reach out to your Schulte contacts to discuss the decision and any related restrictive covenant issues.
This communication is issued by Schulte Roth & Zabel LLP for informational purposes only and does not constitute legal advice or establish an attorney-client relationship. In some jurisdictions, this publication may be considered attorney advertising. © 2024 Schulte Roth & Zabel LLP. All rights reserved. SCHULTE ROTH & ZABEL is the registered trademark of Schulte Roth & Zabel LLP.
