Federal noncompete proscription blocked by Texas judge
A Texas federal judge has permanently blocked the Federal Trade Commission's noncompete rule, originally set to take effect 4 September 2024. The ruling by U.S. District Judge Ada E. Brown found that the FTC exceeded its regulatory authority and that the rule was arbitrary, capricious, and violated the Administrative Procedures Act. As a result, businesses can continue using non-compete agreements that comply with state laws, pending FTC appeal. However, companies should remain vigilant, as many states have their own restrictions on noncompete clauses, which are not affected by this case.
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