Below is an excerpt of a legal update authored by Robinson+Cole’s Trevor Bradley, Ian Clarke-Fisher, and Stephen Aronson.

On August 20, 2024, in Ryan LLC v. Federal Trade Commission, the U.S. District Court for the Northern District of Texas entered summary judgment in favor of the plaintiffs and set aside the Federal Trade Commission’s (FTC) Final Rule, prohibiting the FTC from enforcing the Final Rule and the Final Rule taking effect nationwide. As succinctly stated by the district court in its decision, “The Court sets aside the Non-Compete Rule. Consequently, the Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.” Decision at 2. 

Background

As we reported in January 2024, April 2024, and July 2024, the FTC issued the Final Rule on April 23, 2024, banning nearly all worker non-compete agreements nationwide effective September 4, 2024. 

On July 3, 2024, the Ryan court enjoined the FTC from implementing or enforcing the Final Rule against only the plaintiffs in that case. Importantly, the July 3^rd ruling did not restrain the FTC from enforcing the Final Rule against other employers. At that time, the court stated it intended to issue a decision on the ultimate merits of the case by August 30, 2024, a promise it made good on this week. 

To read the legal update, click here.