Judge Axes FTC Noncompete Ban: Employers’ Next Moves Explained

Businesses now have a green light to continue enforcing noncompetes on their employees after a Texas federal judge blocked an FTC rule seeking to ban them nationwide, with the caveat that they must navigate state and other federal enforcement to limit the contracts’ use.

The Federal Trade Commission rule barring and voiding nearly all employee noncompetes won’t take effect Sept. 4 as scheduled, after Judge Ada E. Brown ruled the FTC lacked the legal authority to issue it in a Tuesday decision from the US District Court for the Northern District of Texas.

That decision spares employers from the regulation’s ...