Late Tuesday afternoon, the United States District Court for the Northern District of Texas issued a nationwide injunction prohibiting the FTC from enforcing its Non-Compete Rule (“FTC Rule”).  The Court set aside the FTC’s Rule, finding that the FTC acted beyond its rulemaking authority and clarifying that the FTC Rule shall not be enforced or otherwise take effect on September 4, 2024. As we previously noted in an earlier Legal Alert (The FTC’s New Rule Bans Majority of Non-Compete Agreements – SGR Law), the FTC Rule would have required employers that have active non-compete agreements with their workers to notify such workers that the employer will not enforce such non-compete agreements.  As a result of the nationwide injunction, employers do not have to send such notices or otherwise comply with the FTC Rule.  We will continue to monitor developments in the case, including any appeal by the FTC of the nationwide injunction.

If you have any questions regarding the FTC Rule or the recent court decision, please contact your Labor and Employment counsel or your Antitrust and Trade Regulation counsel at Smith, Gambrell & Russell, LLP.