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Court Orders Limited Injunction Against FTC Enforcement of Non-Compete Regulations
Jul 3, 2024

Court Orders Limited Injunction Against FTC Enforcement of Non-Compete Regulations

Topics: Court Decisions, Legal Information, Non-Compete and Trade Secrets

Judge Brown of the United States District Court for the Northern District of Texas issued a much anticipated Preliminary Injunction to stay the September 4, 2024 effective date of the FTC’s announced ban on non-compete agreements in the employment sector and to enjoin enforcement against the Plaintiffs that filed the case.

However, the injunction does not reach most employers in the United States as it is limited to the named plaintiffs, Ryan, LLC and Plaintiff-Intervenors Chamber of Commerce of the United States of America, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce. The Court goes to great lengths to clarify that the injunction is not a nationwide injunction and does even not apply to members of any of the intervenors.

The Court’s 33-page ruling also indicated that a separate order will specify the terms of the injunctive relief in more detail. Moreover, the Court indicated that it intends to make a final order potentially disposing of the case by August 30, 2024.

While it is possible that greater relief may be forthcoming to most employers in the United States (if other courts follow the reasoning adopted by Judge Brown or if Judge Brown’s final disposition order has a wider impact), that time has not arrived. Therefore, any employer that utilizes non-compete agreements with employees should consult with counsel, such as Dan M. Forman and Ashley Halberda of CDF’s Unfair Competition and Trade Secret Practice group for advice about preparing to give notices and other restrictions that the FTC sought to impose. Click here for more details about the regulations.

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For over 25 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

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About the Editor in Chief

San Diego Associate Attorney. Taylor has experience defending employers of all sizes in employment-related claims regarding wrongful termination, discrimination, harassment, retaliation, COVID-19 compliance, and employment-related tort and contract claims. Taylor also has experience defending management in wage and hour class actions and PAGA representative actions. Taylor is a member of the Lawyers Club of San Diego and received her Juris Doctor from the University of San Diego School of Law, where she was a member of the Student Bar Association, Employment and Labor Law Society, Business Law Society, and Women’s Law Caucus.
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