Federal Court Upholds USCIB’s Position on Non-Compete Agreements

Earlier this year, USCIB, alongside ten other industry associations, filed joint amicus briefs in support of two federal court challenges to the Federal Trade Commission’s (FTC) recently published rule banning noncompete agreements, which was scheduled to go into effect on September 4, 2024. On August 20, 2024, the US District Court for the Northern District of Texas upheld USCIB’s position, setting aside the rule on the basis that the FTC acted arbitrarily and capriciously and outside its statutory authority. 

For now, the FTC’s nationwide ban on non-compete agreements will not go into effect due to the Texas court ruling. This preserves the status quo for businesses currently using non-compete agreements in US states that permit them. The FTC, however, is likely to appeal the Texas decision, which could result in a further determination of this issue next year.