FTC Noncompete Ban Blocked

A federal district court judge has issued a nationwide injunction that prevents the FTC noncompete ban from taking effect. United States District Judge Ada Brown of the Northern District of Texas found the FTC lacks the authority to ban allegedly unfair methods of competition through the adoption of broad rules. The court therefore enjoined the FTC's noncompete ban from taking effect.

This spring, the FTC issued a final rule that sought to ban the use of virtually all noncompete agreements by employers nationwide. We have previously written about the rule here. The rule not only prohibited the use of explicit noncompete agreements, but also prohibited other arrangements that purportedly function to prevent a worker from seeking or accepting work with another person after their current employment ends. The final rule was slated to take effect on September 4.