For many months, I’ve been telling anyone who would listen that we had a long way to go before the FTC’s ban on noncompete agreements would take effect.
Earlier today, a federal judge in Texas issued her long awaited decision imposing a nationwide injunction on the rule.
She held that the agency did not have authority to put out rules related to unfair methods of competition, including the noncompete rule.
This injunction, barring any immediate appellate action reversing it, which seems unlikely, essentially means that the rule will NOT go into effect in September as scheduled.
For employers, this ruling may be a mixed bag for some. Some may have liked a single rule to follow and may have wanted to hire applicants from competititors. Others will breathe a sigh of relief that their noncompete agreements are safe for now.
We’ll have more in the upcoming days as we review the implications of the decision but for now, employers can put on hold any plans to eliminate their noncompete.