In April 2024, the Federal Trade Commission voted to prohibit post-employment non-competes. The rule was set to take effect on September 4, 2024.  The rule was to render all non-competes for employees unenforceable, except if senior executives had existing non-competes already in effect.

However, on August 20, 2024, a federal judge in Texas blocked the Federal Trade Commission’s Rule on banning non-competes. This decision sets aside the Federal Trade Commission’s rule nationwide, and therefore, the Rule cannot be enforced or take effect on September 4, 2024.

Because of this ruling, employers do not need to send notices to employees who are bound to an existing non-compete that it will no longer be enforceable. Further, companies can continue to consider using non-compete agreements for their employees.

The Federal Trade Commission is considering appealing the decision. However, until then, the non-compete ban will no longer go into effect on September 4, 2024.

Related Article: Non-Competes No More: The 120 Days Begins to Toll May 7