July 23, 2024
Different Judge Gives FTC’s Noncompete Rule Hope
You may have read my article on July 3rd reporting that one U.S. District Court Judge (TX) granted a preliminary injunction delaying implementation of the FTC’s rule banning noncompetes. The decision was based in part on the judge’s finding that the FTC “lacks substantive rulemaking authority with respect to unfair methods of competition.”
On July 23rd, another U.S. District Court Judge (PA) held that the FTC’s rule did not exceed the Commission’s statutory authority.
What now? The rule is still set to take effect on September 4th. The TX judge noted, “While this order is preliminary, the Court intends to rule on the ultimate merits of this action on or before August 30, 2024.”
Even if the judge issues a preliminary injunction that applies nationwide, appeals would follow and, like the current overtime rule, we may have a federal rule take effect but with an uncertain future.
Stay tuned. Prepare to give individuals with whom you have a current noncompete agreement notice that it may no longer be enforceable as of September 4, 2024.
