{ Banner }

Labor & Employment Blog

Labor & Employment Blawg

The Labor & Employment Blog provides employers with breaking news, insights, and legal analysis on the wide range of labor and employment issues facing employers and businesses.  While the Blog provides a general summary of regulation updates, it is not intended to be, and should not be relied upon as, legal advice.  The labor & employment attorneys at Chamberlain Hrdlicka stand ready to counsel employers on the issues they face.

Larry Carbo, Shareholder and Co-Chair

Diana Perez Gomez, Shareholder and Co-Chair

Julie Offerman, Shareholder

Kellen Scott, Shareholder

Leslie Tan, Senior Counsel

Elizabeth Feeney, Associate

AmyJo "AJ" Foreman, Associate

Lucas Meng, Associate

Hannah Strawser, Associate

Chamberlain Hrdlicka Blawgs

Appellate Blog

Business and International Tax Blog

Employee Benefits Blog

Immigration Blog

Labor & Employment Blog

Maritime Blog

SALT Blog/Blawg

Tax Blog/Blawg

Texas Federal Court Finds FTC Exceeded Its Authority by Promulgating Non-Compete Ban and Enjoins FTC from Enforcing Ban Against Named Plaintiffs and Intervenors

The Federal Trade Commission’s (FTC) final rule banning most non-compete agreements is set to go into effect on September 4, 2024. If the final rule goes into effect, it will invalidate most employee non-compete agreements and will require employers to provide notice to most workers (current and former) that existing non-compete agreements will not be enforced. Chamberlain Hrdlicka’s prior alert regarding the Final Rule can be found here.

On July 3, 2024, in the case of Ryan, LLC v. The Federal Trade Commission, a Texas federal court issued a preliminary injunction that blocks the FTC from implementing or enforcing the non-compete ban against the entities that brought and joined the lawsuit. Significantly, the Court declined to grant a nationwide injunction that would extend to all employers.

As it stands, the non-compete ban is still set to become effective on September 4, 2024, for all other businesses nationwide. Nevertheless, the court’s ruling is a significant win for employers and paves the way for future legal challenges. Specifically, the court found that the plaintiffs are likely to prevail on their arguments that the non-compete ban exceeds the FTC’s statutory authority and is arbitrary and capricious.

Although the Ryan Court’s recent ruling is limited in scope, there is still a good possibility that the FTC’s non-compete ban will be blocked for all employers. The Ryan Court intends to issue a final decision on the merits by August 30, 2024. There are additional legal challenges to the non-compete rule pending in different courts. Accordingly, whether and when the non-compete ban will go into effect remains uncertain.

Chamberlain Hrdlicka’s Labor & Employment Group will continue to monitor and provide updates regarding the status of the FTC’s non-compete ban. Please feel free to send us an e-mail at employmentlaw@chamberlainlaw.com or call us if you have any questions about the Rule and its potential impact on you or your business. 

  • Julie R. Offerman

    Julie is an experienced litigation attorney in Chamberlain’s Houston office. She has substantial experience defending employers nationwide in wage and hour class and collective action lawsuits, including matters involving ...

  • Kellen R. Scott

    Mr. Scott maintains a general civil litigation practice in state and federal courts, with particular emphasis on employment law, governmental defense, and civil rights.

    His practice includes the defense of employers and ...