
On Aug. 20, 2024, the U.S. District Court for the Northern District of Texas issued an order blocking the Federal Trade Commission’s (FTC) noncompete ban, which had a scheduled effective date of Sept. 4, 2024. The court had previously put the noncompete ban on hold in this case (Ryan LLC v. FTC), but only for plaintiffs. The most recent ruling blocks the ban for all employers and prevents the ban from taking effect on Sept. 4, 2024, or thereafter.
Background
On May 7, 2024, the FTC published a final rule prohibiting employers from entering into or enforcing noncompete clauses with most employees. Subject to very limited exceptions, the final rule provided that:
- The use of noncompete clauses would be banned as of the effective date.
- Any existing noncompete clauses (other than those entered into with senior executives) would be invalidated.
- Employers would have to notify all employees (other than senior executives whose existing noncompete agreements would remain enforceable) that their existing noncompete agreements would not be enforced.
The enforceability of noncompete clauses is currently determined by state and local legislatures and courts. Instead, the FTC rule would have governed the enforceability of noncompete clauses at the federal level and superseded any less restrictive state laws or judicial interpretations.
Current Impact
In light of the Texas court’s ruling, employers will not need to take immediate steps to invalidate existing noncompetes, update agreements, or issue notices. Employers may also continue to rely on state-level guidance regarding the enforceability of noncompetes. However, the FTC will likely appeal the ruling, so employers should continue to monitor for updates in this case.
Contact us to see how you could minimize risk:
Recent News
Construction Industry Fatalities Decline in 2024
In 2024, total workplace fatalities in the United States fell to 5,070, the lowest number since 2020.
How an Extra Biweekly Payroll Period in 2026 Impacts Payroll
For employers that run biweekly payroll, 2026 introduces a unique scheduling challenge.
Employee Spotlight: Lane Trust
Please help us welcome Lane to the Seubert Team as a Strategic Risk Advisor!
Employers Should Prepare for 2026 RxDC Reporting
Group health plans and health insurance issuers must annually submit detailed information on prescription drug and health care spending to the CMS.
DOL Announces Proposed Independent Contractor Rule
The DOL announced a proposed rule to rescind its 2024 final independent contractor rule and replace it with an analysis of employee classification under the FLSA.
Improving the Effectiveness of Cybersecurity Training
Workforce cybersecurity training is a critical part of a company’s security risk management program.

