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IMPORTANT LEGAL UPDATE
FTC’s attempted ban of noncompetition agreements is ruled invalid.
On August 20, 2024, a federal district court ruled that (1) the Federal Trade Commission (FTC) lacked authority to issue the regulation and (2) the regulation was arbitrary and capricious. Even though this case is based in Texas, that ruling has a “nationwide effect” and applies “in all judicial districts equally” throughout the United States.
There is still the possibility that the FTC will appeal that ruling and that a higher court might overturn it. However, as of now, employers are not obligated to send notices of the regulation to employees and do not need to cancel their noncompetition agreements.
We encourage you to stay tuned to this issue or consult Wood + Lamping’s Litigation or Labor & Employment attorneys with any questions.
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