August 21, 2024
By Mark Fahleson, Tara Paulson, Julie Schumacher
Rembolt Ludtke Employment & Labor Practice Group
On August 20, 2024, the U.S. District Court for the Northern District of Texas set aside the final rule issued by the Federal Trade Commission (FTC) scheduled to go into effect on September 4. The rule would have prevented most employers from using or enforcing noncompetition agreements against employees. Holding the FTC’s rule unlawful, the court went further to issue a nationwide injunction prohibiting the FTC from enforcing the rule.
A copy of the court’s decision can be found here.
Absent further legislative or judicial action or more misguided mischief from the National Labor Relations Board (NLRB), state law will continue to govern the enforceability of employee noncompetition agreements. Businesses and organizations are encouraged to consult with their employment law counsel regarding their use of noncompetes and nonsolicitation agreements
This article is provided for general information purposes only and should not be construed as legal advice. Those requiring legal advice are encouraged to consult with their attorney.
