The Federal Trade Commission (FTC) published a final rule banning nearly all non-compete agreements, nationwide, on May 7, 2024, to be effective September 4, 2024. However, a recent lawsuit in the United States District Court for the Eastern District of Texas challenged the final rule’s lawfulness. On August 20, 2024, the Court held that the FTC’s non-compete rule was unlawful, and that the FTC lacks any substantive rule making authority with respect to unfair methods of competition. As such, the rule was blocked and non-compete agreements are still available to the extent allowable under Minnesota noncompete law.

Appeals by the FTC from this ruling are expected. Such appeals would be heard by the Fifth Circuit Court of Appeals and possibly even the U.S. Supreme Court, both of which have issued recent decisions reducing the power of federal agencies.

H&S is here to assist you with your questions and concerns regarding non-compete agreements. Give us a call to learn how we can help you continue to protect your business interests.

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