On August 20, 2024 a Texas federal court blocked the Federal Trade Commission's (FTC) Noncompete rule scheduled to go into effect on September 4th, 2024. the court ruled that the FTC violated the Administrative Procedure Act (APA) with its noncompete rule. The court ruled that the FTC acted beyond its authority, and the rule was arbitrary and capricious. The court also called the rule overbroad for its attempt at a one-size-fits-all approach. It's likely the FTC will appeal the decision. The FTC originally issued the rule on April 23, 2024 prohibiting employers from entering into and enforcing non-compete agreements with most workers.
The court's August 20, 2024 ruling is not party-restricting and affects persons in all judicial districts equally. Said another way, the FTC may not enforce the rule against any party.
