In late August, the Federal Trade Commission ("FTC") indicated that it likely would appeal the Texas District Court's ruling, which blocked the FTC's Non-Compete Rule nationwide.

True to its word, the FTC has appealed the ruling.

Texas District Court Blocks the Non-Compete Rule

As we previously reported, on August 20, 2024, Judge Ada E. Brown, a United States District Judge for the Northern District of Texas, granted Ryan LLC and the U.S. Chamber of Commerce's Motions for Summary Judgment against the FTC and set aside the Non-Compete Rule. Judge Brown concluded that the Non-Compete Rule is "arbitrary and capricious" because it is unreasonably overbroad. As a result of this ruling, the Non-Compete Rule was not enforced and did not take effect on September 4, 2024.

What Would the Non-Compete Rule Have Changed?

As a quick refresher, the FTC's Non-Compete Rule, if it were to take effect, would:

1. Prohibit employers from entering into and enforcing new non-competes with all workers (including but not limited to, employees, independent contractors, externs, interns, volunteers, apprentices, and sole proprietors who provide a service to a client);
2. Render existing non-competes unenforceable (except for "senior executives"); and,
3. Require employers to notify current and former workers (except senior executives) that their non-competes are no longer enforceable.

The FTC's Appeal to the Fifth Circuit

On October 18, 2024, the FTC filed a notice of appeal to the United States Court of...

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