A Texas judge just blocked the FTC’s new noncompete rule that was scheduled to take effect on September 4. Ada Brown, a U.S. District Court Judge in the Northern District of Texas, ruled that the Federal Trade Commission’s prohibition was “arbitrary and capricious” because it was unreasonably broad without a rational explanation.
What does it mean to you? What should you do?
Non-competes can still be illegal.
Victoria Graham, FTC spokesperson Victoria Graham, has stated that the FTC will appeal Judge Brown’s ruling. She is obviously not happy with the decision. This ruling was not a surprise to legal experts and should not have surprised the FTC. The FTC Commission only voted 3 to 2, and acknowledged in their documentation that the ruling was too broad. They admitted that executives have access to legal counsel, and are not as vulnerable to noncompetes than other people.
