This afternoon, Judge Ada Brown of the US District Court for the Northern District of Texas issued a ruling that strikes down the Federal Trade Commission's ("FTC") final rule (the "FTC Rule") prohibiting the use of noncompetition restrictions in the workplace. Judge Brown held that the FTC exceeded its statutory authority to issue a non-compete ban and that the FTC Rule was "arbitrary and capricious." The Court held that the FTC Rule is "unlawful" and set the FTC Rule aside on a nationwide basis. Consequently, the FTC Rule will not take effect anywhere in the United States, and employers have no obligation to issue the notice to current and former employees regarding nonenforcement of noncompetes on or before Sept. 4, 2024 that would have been required had the FTC Rule taken effect.
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