CLIENT ALERT: COURT STRIKES DOWN NON-COMPETE RULE – WILL NOT GO INTO EFFECT ON SEPTEMBER 4, 2024

Dear Clients and Friends: On Tuesday, August 20, 2024, Judge Ada E. Brown, of the U.S. District Court for the Northern District of Texas, ruled that: “the FTC lacks statutory authority to promulgate the Non-Compete Rule, and that the Rule is arbitrary and capricious.”1

Judge Brown then declared that: “the Rule shall not be enforced or otherwise take effect on September 4,2024, or thereafter.”2

As such, you are not required to take any action relating to past, present, or future non-compete provisions that had been required pursuant to the Non-Compete Rule prior to Judge Brown’s ruling.  

This ruling will permit businesses to continue past practices of using and enforcing lawful non-compete clauses in employment and contractor agreements to protect customer relationships, business operations, trade secrets, and confidential and proprietary information.  

SLG has extensive experience advising clients regarding US. employment matters, FTC rules, and related laws, and regulations. For further guidance on the Rule, please contact SLG at info@shelgroup.com to schedule a consultation or check out our website at www.shelgroup.com for more information about the firm.

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1  See Ryan LLC v. Federal Trade Commission, 24-cv-00986-E (N.D. Tex. 2024), ECF No. 211, at 26.
2  Id. at ECF No. 212.