The Federal Trade Commission’s non-compete rule is set to go into effect Sept. 4, placing a comprehensive ban on non-compete clauses for employees across the U.S. But after recent federal court rulings, there are doubts about whether the rule will ever go into effect.
Earlier this month, a Texas federal judge ruled that the FTC did not have the authority to enact its non-compete ban, and issued an injunction that applies only to the affected parties in the case. In other words, the FTC cannot enforce the rule on Ryan LLC, a tax service provider based in Dallas, and the plaintiffs in this case. Meanwhile, a Pennsylvania federal judge released a contrary ruling on the ban just last week, stating that the FTC does have the power to ban practices that harm competition and innovation.
