The Federal Trade Commission (FTC) on October 18 appealed a federal court order that invalidated a rule relating to non-compete agreements.

On August 20, Judge Ada Brown, of the U.S. District Court for the Northern District of Texas, struck down an FTC rule that would have banned nearly all non-compete agreements nationwide, ruling that the FTC lacked the statutory authority to issue the non-compete rule, and that the rule is arbitrary and capricious under the Administrative Procedure Act. As such, the court held the rule to be unlawful and set it aside with nationwide effect. For more, see our August 26, 2024 analysis and background.

Observers expected the FTC would appeal and, indeed, on October 18 the Commission filed notice of appeal to the U.S. Court of Appeals for the Fifth Circuit.

For now, the noncompete ban is still enjoined under Judge Brown’s August ruling, and it will remain blocked unless and until the Fifth Circuit reverses that ruling.

LeadingAge will follow the progress of the appeal over the coming months.