As you know, the Federal Trade Commission (FTC) issued a final rule that essentially bans noncompete agreements nationwide (with few exceptions). The rule is set to take effect on September 4, 2024.
Recently, the U.S. District Court for the Northern District of Texas issued a preliminary ruling preventing the ban from taking effect against certain plaintiffs who had sued the FTC for exceeding its statutory authority in promulgating the rule.
Now, however, in a similar case with plaintiffs seeking a preliminary injunction of the final rule, the U.S. District Court for the Eastern District of Pennsylvania has refused to issue an injunction, finding that the FTC has the power to prevent unfair methods of competition.
A final decision on the merits has not yet been reached in the Texas case. It is due on or before August 30, 2024. When it is reached, it is possible that the decision will reverse the FTC’s ban nationwide. We will continue to update you as these cases develop.
