A federal judge in Texas has officially blocked the U.S. Federal Trade Commission (FTC) from enforcing a nationwide ban on non-compete agreements in the United States. This means that the provisions of the FTC’s ban – which were scheduled to take effect nationwide on September 4, 2024 - will no longer take effect for the time being.

The FTC proposed a nationwide ban on non-compete agreements, arguing they limit job mobility, suppress wages, and hinder entrepreneurship. While many states and worker advocacy groups support the ban, businesses have filed lawsuits, claiming the FTC lacks the authority for such a sweeping rule. Courts have issued conflicting rulings, with some supporting the ban and others questioning the FTC’s power. The outcome of these legal challenges could reshape U.S. labor practices.

The FTC has banned non-compete agreements in the U.S., marking a major shift in employment law. This move enhances job mobility, wage potential, and entrepreneurship, though NDAs and trade secret protections remain in force. Non-competes previously restricted employees from working for competitors or starting similar businesses post-employment. The ban supersedes state laws, requiring employers to pivot to stronger NDAs, trade secret protections, and improved employee retention strategies.