Yesterday, a U.S. District Court judge for the Northern District of Texas struck down the Federal Trade Commission’s (FTC’s) April ruling banning most noncompete agreements. The judge ruled that the FTC exceeded its authority when it issued the ban, and the rule was “arbitrary and capricious.”
The case stems from a lawsuit brought by the U.S. Chamber of Commerce, several other business organizations, and a tax service and software provider in Texas.
The ban, set to take effect on September 4, required employers with existing noncompete agreements to issue an employee communication stating the noncompete language was no longer enforceable.
Should the FTC appeal the ruling, the matter could go before the U.S. Supreme Court.
For additional information contact your Bukaty benefits consultant.