On August 20, 2024, the United States District Court for the Northern District of Texas issued an order setting aside the FTC's rule prohibiting non-compete agreements, which was scheduled to go into effect on September 4, 2024. Previously, the court held that the plaintiffs, the U.S. Chamber of Commerce and others, were likely to prevail on their arguments that the rule was invalid, and issued a preliminary injunction staying issuance of the rule. See post here. However, the stay only applied to the parties in the case, not to employers and employees generally. The court indicated at that time, that it would issue a final order by August 30.
The August 20 order was the court's final ruling that the FTC's rule is invalid, and it applies to all employers and employees in the United States. This means that employers, many of whom were preparing to revise their agreements and policies in case the rule went into effect (no small task), will not have to comply with the rule.
Now that the court's order is final, the FTC has an opportunity to appeal to the Fifth Circuit Court of Appeals. It has indicated that it is considering an appeal.
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