Court Overturns Previous Injunction Against Federal Trade Commission’s Noncompete Ban
The convoluted journey of the FTC’s attempt to ban noncompete agreements has taken another turn. On July 23, a Federal District Court Judge reversed a ruling from a lower Federal Court in Texas that had temporarily blocked the FTC from enforcing the rule, pending ongoing litigation. The most recent ruling states that the FTC has the power to ban anticompetitive practices, including noncompete agreements. The ruling also states that the plaintiff had not shown that it would suffer irreparable harm from the rule if it were allowed to go into effect while related lawsuits proceed. The noncompete rule is set to take effect on September 4. Four states (California, Minnesota, Oklahoma, North Dakota) have largely banned noncompete agreements and at least a dozen more have laws limiting their use, but the FTC rule would be the first nationwide prohibition.