Texas Court Blocks FTC'S Non-Compete Rule

On Wednesday, July 3, 2024, a federal judge in Texas blocked the Federal Trade Commission's rule that seeks an almost complete ban of non-compete agreements. In her ruling, Judge Ada Brown of the United States District Court for the Northern District of Texas granted the plaintiffs Motion for a Preliminary Injunction, delaying the effective date of the rule, but only as to the plaintiffs in the case before her. In doing so, Judge Brown noted that the FTC had exceeded its authority in issuing the Rule and that the lawsuit filed by the U.S. Chamber of Commerce and other business groups was "likely to succeed on the merits." Notably, the judge refrained from blocking the rule on a nationwide basis, at least for the time being.