On August 20, 2024, U.S. District Judge Ada Brown from the Northern District of Texas issued a decision setting aside the Federal Trade Commission’s (“FTC”) non-compete ban (the “Rule”) and prohibiting the FTC from enforcing the Rule. Judge Brown found the Rule was unlawful because the FTC exceeded its rulemaking authority in issuing the Rule and the Rule was arbitrary and capricious.

The takeaway is that Rule “shall not be enforced or otherwise take effect on September 4, 2024, or thereafter.” The FTC may appeal, but that process will take time. We will monitor.

If you have any questions about this decision, please contact David Baron, Anne C. Patin or your relationship partner at the Firm.