Breaking News: A Federal Judge Has Halted the FTC’s Non-Compete Ban

On August 20, 2024, a Federal Judge in the Northern District of Texas issued a ruling that blocked the FTC Rule banning non-competes across the country. The judge’s prior ruling in the Ryan v. FTC case was limited only to the plaintiffs in that case and did not extend to other companies.

In this final ruling, the ban has been expanded nationwide. The reasoning is nearly identical to the more limited ruling, indicating the “FTC exceeded its statutory authority in implementing the Rule, and the Rule is arbitrary and capricious.” 

Thus, for those have who have been preparing to issue notices to workers regarding a current non-compete or updating our prior documents to comply with the ban’s September 4th effective date, that preparation can stop for now. The FTC has indicated they will appeal this ruling to the Fifth Circuit Court of Appeals.  

Even without the ban taking effect, the work done to prepare for compliance with it was not done in vain. Updates to the documents needed to comply with laws that have come into effect since the document’s last revision will still be needed to ensure it remains a valid agreement between the company and the worker.

As always, TCWGlobal is staying on top of the developments and ensuring we partner with our clients to comply with the changes! As an employer of record, we're here to help companies monitor and manage legal changes so they don't get caught off guard.

Click here to learn how our employer of record services can help you stay on track!