Late yesterday, August 20, 2024, Ada E. Brown, District Court Judge in the Northern District of Texas, issued her eagerly awaited opinion in Ryan LLC v. FTC where she struck down the FTC’s ban on non-compete agreements. This ban would have invalidated almost all past, current, and future non-compete agreements. In her opinion, Judge Brown found that the FTC exceeded its statutory authority and that the rule itself was “arbitrary and capricious.”
Moreover, this ruling covers employers nationwide, not just the plaintiff in the case. This means that, for now, the non-compete ban will not be going into effect on September 4, 2024.
The FTC can appeal this decision to the Court of Appeals, but it is unclear what direction the FTC will take given the Supreme Court’s recent overturning of the Chevron deference standard. The November election will also undoubtedly play a role in what direction the agency takes moving forward.
If you have any questions on the non-compete ban or any other employment matter, please reach out to Michael A. Airdo at mairdo@airdowerwas.com or James C. Jansen at jjansen@airdowerwas.com.