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Court Strikes Down FTC’s Non-Compete Ban
A Texas federal court judge struck down the Federal Trade Commission’s nationwide ban of non-compete agreements on August 20, 2024, shortly before the ban’s effective date of September 4, 2024. The court’s decision means employers nationwide can maintain and enter new non-competes as permitted by state law.
Federal Trade Commission Prohibits Employers from Enforcing Noncompete Agreements
On Tuesday, April 23, 2024, the Federal Trade Commission (FTC) voted to ban most noncompete agreements. The ban excludes active non-compete agreements for Senior Executives (those who make more than $151,164 per year and can make policies) but will ban future non-compete for Senior Executives.
Hostility Toward Non-Competes Continues
We previously reported on the Federal Trade Commission’s proposed rule banning non-competes. The final vote on that rule has reportedly been delayed until 2024. In the meantime, two more states and the National Labor Relations Board have taken steps to outlaw non-competes.
FTC Issues Proposed Rule Banning Non-Competes
On January 5, 2023, the Federal Trade Commission (“FTC”) proposed a rule prohibiting employers from entering or enforcing non-compete clauses with their workers. The proposed rule would supersede any inconsistent state law. Given a March 2022 US Treasury Department report finding that one in five Americans are subject to a non-compete, this proposed rule – if it becomes final – will have a significant impact on the workplace.