Federal District Court Blocks FTC's Noncompete Rule

Real World Impact: Making good on her promise to make a ruling on the FTC Noncompete Rule on or before August 30, 2024, United States District Judge Ada Brown granted a motion for summary judgment that sets aside the FTC Noncompete Rule and prohibits its enforcement nationwide. This means employers should go "pencils down" and stop preparing the notices we suggested here. The FTC Noncompete Rule is no longer a concern.

What does this mean for employers?

While this is a victory for employers using noncompete agreements with current and former employees, this opinion does not necessarily mean your company's noncompete agreements and other restrictive covenants are valid and enforceable under applicable state law. We expect continued scrutiny by the courts of the enforceability of these agreements and more state restrictions on these agreements in the future.