On August 20, 2024, a Texas federal judge issued a nationwide injunction barring the implementation of a controversial Federal Trade Commission (FTC) regulation that would have invalidated tens of millions of existing non-compete agreements and precluded the adoption of new covenants. The decision comes as a tremendous relief to employers that feared the FTC’s regulation would have made it nearly impossible to prevent unfair competition and protect employers’ investment in its employees and against the misappropriation of confidential and proprietary information.
As we first reported in April, the FTC issued a regulation (the “Non-Compete Rule” or “Final Rule”) that, on its September 4, 2024 effective date, would have barred the enforcement of existing non-compete covenants in all but a handful of cases involving highly compensated senior executives, finding that such agreements are inherently anti-competitive due to their impact on employee mobility. The Final Rule also prohibited employers from entering into nearly all new non-compete agreements after the Effective Date, regardless of the job duties performed, and incomes earned, by employees.
Since the publication of the Final Rule, it has been subject to various legal challenges, with mixed results. (See here and here.) For example, in July 2024, a Texas federal court issued a preliminary injunction postponing the implementation of the Final Rule, but only as to the parties before the Court, leaving open the...
The Justice Department has fired back at the Southern Poverty Law Center after it filed an injunction against Acting Attorney General Todd Blanche for saying the group didn’t share information from...