Client Alert: Texas District Court Sets Aside the FTC’s Non-Compete Rule
On August 20, 2024, Judge Ada Brown of the Northern District of Texas struck down the FTC’s Non- Compete Rule that, had it gone into effect, would have prohibited virtually all employee non-compete agreements nationwide. Granting summary judgment for the challengers, the court held that the FTC lacks statutory authority to promulgate the Rule and that the Rule is arbitrary and capricious. Accordingly, the court invalidated the Rule under the Administrative Procedure Act (“APA”), and the FTC cannot enforce it against any business in the United States. The district court’s decision, however, is still subject to appellate review.
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