District Court Strikes Down Ban on Noncompete Agreements

August 21, 2024

District Court Strikes Down Ban on Noncompete Agreements

WASHINGTON, D.C. (Aug. 21, 2024) – NFIB commends yesterday’s decision by the U.S. District Court for the Northern District of Texas in the case Ryan, LLC. v. Federal Trade Commission (FTC). The Court agreed that the non-compete rule exceeds the FTC’s statutory authority and ordered that the rule not take effect nor be enforced. NFIB filed an amicus brief with several business groups in support of the Plaintiffs. “Small businesses can breathe a sigh of relief following this decision,” said Beth Milito, Executive Director of the NFIB’s Small Business Legal Center. “This rule would have been disastrous for small businesses on many levels. Thankfully the Court agreed and rejected the FTC’s final rule before it could wreak havoc on Main Street employers.” The case concerned the FTC’s final rule banning noncompete agreements. NFIB opposed the final rule when it was issued in April 2024. NFIB’s brief argues that the rule was based on a flawed cost-benefit analysis and that the Commission’s inconsistent reasoning proved the rule to be arbitrary and capricious. The brief was filed with the National Retail Federation, International Franchise Association, Associated Builders and Contractors, American Hotel & Lodging Association, National Association of Wholesale Distributers, Independent Electrical Contractors Consumer Technology Association, the Home Care Association, the Restaurant Law Center, and U.S. Council for International Business. The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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