FTC Ban on Non-Agreements

The Federal Trade Commission’s (FTC) ban on non-compete agreements, which was set to take effect nationwide on Sept. 4th, has been blocked and is now on hold. A federal judge in Texas upheld a challenge to the FTC’s rule banning non-competes, saying the government agency lacks the authority to put the ban in place and that it was unreasonably overbroad.

The lawsuit which was filed by the U.S. Chamber of Commerce along with a Texas tax firm, provides confirmation to many employers for the foreseeable future that they will not be required to notify current and former employees that their non-competes are unenforceable. The FTC stated that they are disappointed in the ruling, and it is likely to be headed for appellate review. This was a ruling on the FTC’s national ban. Certain states, however, still have laws banning non-compete agreements.