Hello, I am Matthew Piston, an attorney here at Evans Fox. Today we are going to be discussing an update on the current status of the enforceability of non-competition agreements.
As many of you may know, the Federal Trade Commission intended to place a ban on non-competition agreements that was to be effective on September 4, 2024. This ban would have prohibited the use of non-competition agreements in employer/employee relationships, and would have made it illegal to attempt to enforce those agreements.
While it was the intent of the FTC to ban these agreements, on August 20, 2024, the United States District Court for the Northern District of Texas held that the FTC’s non-compete rule was unlawful and prohibited the rule from taking effect on September 4, 2024. And while this decision came out of the state of Texas, because it was issued by a Federal District Court, the decision is binding on the FTC and it applies to all states.
As of right now, the FTC must make a decision on whether it wishes to appeal the decision from the Northern District of Texas, and if the FTC does decide to appeal the decision, and is successful in that appeal, the implications may have significant effects on employees and employers in numerous industries.
If you have any questions about a non-competition agreements, please feel free to reach out to one of the attorneys at Evans Fox and we will assist you.