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THE SSP FIRM BLOG
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Federal District Court Blocks FTC Non-Compete Rule from Taking Effect on September 4
Wednesday, August 21, 2024
Federal District Court Blocks FTC Non-Compete Rule from Taking Effect on September 4
This serves as an update to our April 25, 2024 post, FTC’s Final Rule Banning Non-Compete Agreements.
On August 20, 2024, Judge Ada Brown in the U.S. District Court for the Northern District of Texas struck down the FTC’s final rule banning non-compete agreements. Specifically, the court entered a final judgment blocking the final rule on a nationwide basis, and as a result, at this time, the non-compete ban will not be enforced or otherwise go into effect on September 4, 2024.
Judge Brown temporarily blocked the rule in July, however, at that time, she declined to issue a nationwide injunction, and instead limited the injunction only to the named parties in the lawsuit. However, in the August 20, 2024 ruling, Judge Brown issued a permanent, nationwide injunction barring the rule from taking effect.
We expect that the FTC will immediately appeal the decision to the Fifth Circuit, and this case may eventually end up before the U.S. Supreme Court. However, at this time and unless an appeals court overturns this decision, the non-compete rule will not become effective on September 4, 2024. Businesses that were planning to comply with the non-compete rule including by providing mandatory notices to current/former employees regarding the rule’s effects should hold off on doing so until further notice.
SSP will continue to monitor the situation over the coming months and will continue to update this information as new developments arise. If you have any questions regarding the status of the FTC non-compete rule, please feel free to contact our office.
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The SSP Firm Blog
08/21/2024 - Federal District Court Blocks
04/25/2024 - FTC’s Final Rule Banning Non-C
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