On August 20th, a federal judge struck down the Federal Trade Commission’s (FTC) Non-Compete Rule that was set to take effect on September 4th. The FTC’s Non-Compete Rule would have virtually banned non-compete agreements and superseded all state laws relating to non-compete agreements. The Non-Compete Rule was set to take place on September 4th, although Cascade did alert that the ban would likely not take effect.
Specifically, on August 20th, the U.S. District Court for the Northern District of Texas ruled that the FTC’s Non-Compete Rule was unlawful, as the FTC lacked statutory authority to enact such a ban. The federal court vacated the Non-Compete Rule and issued a final judgment preventing the ban from being enforced nationwide.
For now, employers do not need to examine all active non-compete agreements to see those agreements meet the FTC’s Non-Compete requirements, including the new notice requirements. It is important to note that Oregon and Washington employers still need to follow the applicable state laws on non-compete agreements.