What Employers Should Consider. Â
The Federal Trade Commission’s (FTC) Non-Compete Rule, which was scheduled to become effective on September 4, 2024, was set aside last month by US District Judge Ada Brown of the Northern District of Texas in Ryan LLC v. FTC, 2024 U.S. Dist. LEXIS 117418 (N.D. Tex. July 3, 2024).
The Non-Compete Rule, 89 FR 38342 (implementing 16 C.F.R. § 910), would have prohibited, broadly, most non-compete agreements, with limited exceptions for existing non-compete agreements with “senior executives†— as defined by the Non-Compete Rule, and non-compete agreements made in conjunction with the bona fide sale of a business. Employers would also have been permitted to prosecute violations of non-compete agreements that accrued prior to the Non-Compete Rule’s presumed effective date.
