On August 20, 2024, the U.S. District Court for the Northern District of Texas in Ryan, LLC v. FTC, held that the Federal Trade Commission’s non-compete rule is unlawful and ordered that the FTC’s non-compete rule would not take effect on September 4, 2024, or thereafter. The ruling prevents the FTC from enforcing the rule against any company nationwide. Also in August, a Florida court issued an order prohibiting enforcement of the rule, but the prohibition only applied to the employer in that specific case and not all employers nationwide like in the Ryan case. In any event, the Ryan court’s decision means employers across the country can continue to maintain non-competes as permitted by applicable state law.
The FTC has appealed both rulings in the federal appellate courts. The Ryan court’s ruling is expected to remain in effect until the 5th Circuit Court of Appeals issues a decision in the Ryan case, which could occur by mid-2025. A split in Circuit decisions could send the issue to the Supreme Court for further consideration.
Baker Jenner LLLP
