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What the Latest Court Ruling Means for Noncompete Agreements

ARTICLE | October 01, 2024

Authored by Vasquez + Company


The U.S. District Court for the Northern District of Texas has overturned a nationwide ban on noncompete agreements, which was set to take effect on September 4, 2024, following a new rule by the Federal Trade Commission (FTC). This ruling allows companies to enforce existing agreements and create new ones, returning to the legal landscape prior to the FTC's proposed rule.

Key Points:

  • Noncompete Agreements: These contracts prevent employees and contractors from working with competitors after leaving, safeguarding business interests and trade secrets.
  • FTC's Intent: The FTC aimed to ban noncompete agreements over worker mobility and economic concerns but faced significant pushback from the business community.
  • Court Ruling: The court ruled that the FTC overstepped its authority, allowing the continuation of noncompete agreements and stating that the FTC cannot enforce a nationwide ban.
  • Future Implications: The ruling opens the door for continued legal disputes and uncertainty for businesses and workers alike regarding noncompete agreements.

For more information, read the full article here.


Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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