FTC's Non-Compete Rule Struck Down By Texas Court

On April 23, 2024, the U.S. Federal Trade Commission ("FTC") approved a final rule banning non-compete clauses for all workers across the country, with limited exceptions (the "Rule"). Our prior Client Alert summarized the Rule Not So Fast: U.S. Chamber of Commerce Immediately Sues to Stop FTC's Non-Compete Rule from Going into Effect – Meister Seelig & Fein. The Rule was scheduled to go into effect on September 4, 2024.

Business groups immediately sued to block its implementation, including a lawsuit in the Northern District of Texas. Last month, that court issued a preliminary injunction of the Rule, but only as it applied to the parties to the case, noting that a full decision on the validity of the Rule would be issued by August 30, 2024. That decision came on August 20, 2024, with the court ordering that "the Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024 or thereafter."