Non-Competition Agreements Remain Intact - For Now

A previous post discussed a rule issued by the Federal Trade Commission (“FTC”) banning non-competition agreements nationwide. The rule was based on the FTC’s determination that non-competition agreements are an unfair method of competition and a violation of the FTC Act.

The rule was set to take effect on September 4; however, on August 20, a federal judge in Texas struck down the rule, finding that it was too broad and exceeded the FTC’s authority.

The Federal Trade Commission will likely appeal this decision and/or ask for an appellate court to permit the rule to take effect while appeals are pending. For now, however, both employers and employees should assume that their existing agreements remain intact and unchanged.

In any case, the long-term future of non-compete agreements continues to be uncertain. For assistance with your employment agreement, contact our office today.